Correlation Between Marsico Focus and Marsico Global

Can any of the company-specific risk be diversified away by investing in both Marsico Focus and Marsico Global 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 Marsico Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marsico Focus and Marsico Global, you can compare the effects of market volatilities on Marsico Focus and Marsico Global 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 Marsico Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Focus and Marsico Global.

Diversification Opportunities for Marsico Focus and Marsico Global

0.98

Correlation Coefficient

Marsico Focus  Marsico Global

Almost no diversification

The 3 months correlation between Marsico and Marsico is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus and Marsico Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Global 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 Marsico Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Global has no effect on the direction of Marsico Focus i.e., Marsico Focus and Marsico Global go up and down completely randomly.

Pair Corralation between Marsico Focus and Marsico Global

Assuming the 90 days horizon Marsico Focus is expected to generate 1.05 times more return on investment than Marsico Global. However, Marsico Focus is 1.05 times more volatile than Marsico Global. It trades about 0.14 of its potential returns per unit of risk. Marsico Global is currently generating about 0.14 per unit of risk. If you would invest  2,963  in Marsico Focus on September 20, 2024 and sell it today you would earn a total of  307.00  from holding Marsico Focus or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Marsico Focus  vs.  Marsico Global

Marsico Focus

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Focus are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Marsico Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Marsico Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Global are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Marsico Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Marsico Focus and Marsico Global

The main advantage of trading using opposite Marsico Focus and Marsico Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Focus position performs unexpectedly, Marsico Global 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 Marsico Global will offset losses from the drop in Marsico Global's long position.

The idea behind Marsico Focus and Marsico Global 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..