Correlation Between Marsico Focus and Wells Fargo

Can any of the company-specific risk be diversified away by investing in both Marsico Focus and Wells Fargo at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Marsico Focus and Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marsico Focus and Wells Fargo Cb, you can compare the effects of market volatilities on Marsico Focus and Wells Fargo and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Marsico Focus with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Focus and Wells Fargo.

Diversification Opportunities for Marsico Focus and Wells Fargo

0.82

Correlation Coefficient

Marsico Focus  Wells Fargo

Very poor diversification

The 3 months correlation between Marsico and Wells is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus and Wells Fargo Cb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Cb and Marsico Focus is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Marsico Focus are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Cb has no effect on the direction of Marsico Focus i.e., Marsico Focus and Wells Fargo go up and down completely randomly.

Pair Corralation between Marsico Focus and Wells Fargo

If you would invest  2,992  in Marsico Focus on September 25, 2024 and sell it today you would earn a total of  32.00  from holding Marsico Focus or generate 1.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.59%
Values	Daily Returns

Marsico Focus  vs.  Wells Fargo Cb

Marsico Focus

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Focus are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Marsico Focus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wells Fargo Cb

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wells Fargo Cb has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wells Fargo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marsico Focus and Wells Fargo

The main advantage of trading using opposite Marsico Focus and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Focus position performs unexpectedly, Wells Fargo can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wells Fargo will offset losses from the drop in Wells Fargo's long position.

The idea behind Marsico Focus and Wells Fargo Cb pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.