Correlation Between Marsico Midcap and Hodges Fund

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

By analyzing existing cross correlation between Marsico Midcap Growth and Hodges Fund Retail, you can compare the effects of market volatilities on Marsico Midcap and Hodges Fund 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 Midcap with a short position of Hodges Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Midcap and Hodges Fund.

Diversification Opportunities for Marsico Midcap and Hodges Fund

0.92

Correlation Coefficient

Marsico Midcap  Hodges Fund

Almost no diversification

The 3 months correlation between Marsico and Hodges is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Midcap Growth and Hodges Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Fund Retail and Marsico Midcap 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 Midcap Growth are associated (or correlated) with Hodges Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Fund Retail has no effect on the direction of Marsico Midcap i.e., Marsico Midcap and Hodges Fund go up and down completely randomly.

Pair Corralation between Marsico Midcap and Hodges Fund

Assuming the 90 days horizon Marsico Midcap Growth is expected to generate 0.92 times more return on investment than Hodges Fund. However, Marsico Midcap Growth is 1.09 times less risky than Hodges Fund. It trades about 0.07 of its potential returns per unit of risk. Hodges Fund Retail is currently generating about 0.01 per unit of risk. If you would invest  4,974  in Marsico Midcap Growth on September 27, 2024 and sell it today you would earn a total of  190.00  from holding Marsico Midcap Growth or generate 3.82% return on investment over 90 days.

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

Marsico Midcap Growth  vs.  Hodges Fund Retail

Marsico Midcap Growth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Midcap Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Marsico Midcap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hodges Fund Retail

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hodges Fund Retail are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Hodges Fund 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 Midcap and Hodges Fund

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

The idea behind Marsico Midcap Growth and Hodges Fund Retail 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.