Correlation Between Marsico Focus and RAYTHEON

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

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

Diversification Opportunities for Marsico Focus and RAYTHEON

-0.1

Correlation Coefficient

Marsico Focus  RAYTHEON

Good diversification

The 3 months correlation between Marsico and RAYTHEON is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus and RAYTHEON TECHNOLOGIES PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RAYTHEON TECHNOLOGIES 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 RAYTHEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RAYTHEON TECHNOLOGIES has no effect on the direction of Marsico Focus i.e., Marsico Focus and RAYTHEON go up and down completely randomly.

Pair Corralation between Marsico Focus and RAYTHEON

Assuming the 90 days horizon Marsico Focus is expected to under-perform the RAYTHEON. But the mutual fund apears to be less risky and, when comparing its historical volatility, Marsico Focus is 1.19 times less risky than RAYTHEON. The mutual fund trades about -0.1 of its potential returns per unit of risk. The RAYTHEON TECHNOLOGIES PORATION is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6,067  in RAYTHEON TECHNOLOGIES PORATION on December 30, 2024 and sell it today you would earn a total of  835.00  from holding RAYTHEON TECHNOLOGIES PORATION or generate 13.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

Marsico Focus  vs.  RAYTHEON TECHNOLOGIES PORATION

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.

RAYTHEON TECHNOLOGIES

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RAYTHEON TECHNOLOGIES PORATION are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, RAYTHEON sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marsico Focus and RAYTHEON

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

The idea behind Marsico Focus and RAYTHEON TECHNOLOGIES PORATION 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.