Correlation Between Marsico Focus and Goldman Sachs

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

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

Diversification Opportunities for Marsico Focus and Goldman Sachs

0.04

Correlation Coefficient

Marsico Focus  Goldman Sachs

Significant diversification

The 3 months correlation between Marsico and Goldman is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus and Goldman Sachs Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Real 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Real has no effect on the direction of Marsico Focus i.e., Marsico Focus and Goldman Sachs go up and down completely randomly.

Pair Corralation between Marsico Focus and Goldman Sachs

Assuming the 90 days horizon Marsico Focus is expected to generate 1.07 times more return on investment than Goldman Sachs. However, Marsico Focus is 1.07 times more volatile than Goldman Sachs Real. It trades about -0.01 of its potential returns per unit of risk. Goldman Sachs Real is currently generating about -0.18 per unit of risk. If you would invest  3,005  in Marsico Focus on October 6, 2024 and sell it today you would lose (34.00) from holding Marsico Focus or give up 1.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Marsico Focus  vs.  Goldman Sachs Real

Marsico Focus

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Focus are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Marsico Focus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Real 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.

Pair Trading with Marsico Focus and Goldman Sachs

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

The idea behind Marsico Focus and Goldman Sachs Real 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.