Correlation Between Marsico Midcap and Marsico Growth

Can any of the company-specific risk be diversified away by investing in both Marsico Midcap and Marsico Growth 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 Marsico Growth 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 Marsico Growth Fund, you can compare the effects of market volatilities on Marsico Midcap and Marsico Growth 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 Marsico Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Midcap and Marsico Growth.

Diversification Opportunities for Marsico Midcap and Marsico Growth

0.91

Correlation Coefficient

Marsico Midcap  Marsico Growth

Almost no diversification

The 3 months correlation between Marsico and Marsico is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Midcap Growth and Marsico Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Growth 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 Marsico Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Growth has no effect on the direction of Marsico Midcap i.e., Marsico Midcap and Marsico Growth go up and down completely randomly.

Pair Corralation between Marsico Midcap and Marsico Growth

Assuming the 90 days horizon Marsico Midcap Growth is expected to under-perform the Marsico Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Marsico Midcap Growth is 1.22 times less risky than Marsico Growth. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Marsico Growth Fund is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,798  in Marsico Growth Fund on September 26, 2024 and sell it today you would lose (108.00) from holding Marsico Growth Fund or give up 3.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Marsico Midcap Growth  vs.  Marsico Growth Fund

Marsico Midcap Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Midcap Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Marsico Midcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marsico Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Growth Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Marsico Growth 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 Marsico Growth

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

The idea behind Marsico Midcap Growth and Marsico Growth 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.