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 Fund and Marsico Global Fund, 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

0.87

Correlation Coefficient

Marsico Focus  Marsico Global

Very poor diversification

The 3 months correlation between Marsico and Marsico is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus Fund and Marsico Global Fund 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 Fund 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 Fund is expected to under-perform the Marsico Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Marsico Focus Fund is 1.03 times less risky than Marsico Global. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Marsico Global Fund is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,579  in Marsico Global Fund on December 30, 2024 and sell it today you would lose (63.00) from holding Marsico Global Fund or give up 2.44% of portfolio value over 90 days.

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

Marsico Focus Fund  vs.  Marsico Global Fund

Marsico Focus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marsico Focus Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Marsico Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marsico Global Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Marsico Global 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 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 Fund and Marsico Global Fund 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.