Correlation Between Marsico Focus and Dunham Emerging

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

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

Diversification Opportunities for Marsico Focus and Dunham Emerging

-0.25

Correlation Coefficient

Marsico Focus  Dunham Emerging

Very good diversification

The 3 months correlation between Marsico and Dunham is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets 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 Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Marsico Focus i.e., Marsico Focus and Dunham Emerging go up and down completely randomly.

Pair Corralation between Marsico Focus and Dunham Emerging

Assuming the 90 days horizon Marsico Focus is expected to under-perform the Dunham Emerging. In addition to that, Marsico Focus is 1.43 times more volatile than Dunham Emerging Markets. It trades about -0.1 of its total potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.06 per unit of volatility. If you would invest  1,400  in Dunham Emerging Markets on December 21, 2024 and sell it today you would earn a total of  46.00  from holding Dunham Emerging Markets or generate 3.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Marsico Focus  vs.  Dunham Emerging Markets

Marsico Focus

Risk-Adjusted Performance

Very Weak

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

Dunham Emerging Markets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dunham Emerging Markets are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Dunham Emerging 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 Dunham Emerging

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

The idea behind Marsico Focus and Dunham Emerging Markets 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 CEOs Directory module to screen CEOs from public companies around the world.