Correlation Between Causeway International and Marsico Focus
Can any of the company-specific risk be diversified away by investing in both Causeway International and Marsico Focus 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 Causeway International and Marsico Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway International Value and Marsico Focus Fund, you can compare the effects of market volatilities on Causeway International and Marsico Focus 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 Causeway International with a short position of Marsico Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway International and Marsico Focus.
Diversification Opportunities for Causeway International and Marsico Focus
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Causeway and Marsico is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Causeway International Value and Marsico Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Focus and Causeway International 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 Causeway International Value are associated (or correlated) with Marsico Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Focus has no effect on the direction of Causeway International i.e., Causeway International and Marsico Focus go up and down completely randomly.
Pair Corralation between Causeway International and Marsico Focus
Assuming the 90 days horizon Causeway International is expected to generate 1.95 times less return on investment than Marsico Focus. But when comparing it to its historical volatility, Causeway International Value is 1.59 times less risky than Marsico Focus. It trades about 0.07 of its potential returns per unit of risk. Marsico Focus Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,907 in Marsico Focus Fund on August 30, 2024 and sell it today you would earn a total of 1,203 from holding Marsico Focus Fund or generate 63.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway International Value vs. Marsico Focus Fund
Performance |
| Timeline |
| Causeway International |
| Marsico Focus |
Causeway International and Marsico Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway International and Marsico Focus
The main advantage of trading using opposite Causeway International and Marsico Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway International position performs unexpectedly, Marsico Focus 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 Focus will offset losses from the drop in Marsico Focus' long position.| Causeway International vs. HUMANA INC | Causeway International vs. Aquagold International | Causeway International vs. Barloworld Ltd ADR | Causeway International vs. Morningstar Unconstrained Allocation |
| Marsico Focus vs. Growth Fund Of | Marsico Focus vs. HUMANA INC | Marsico Focus vs. Aquagold International | Marsico Focus vs. Barloworld Ltd ADR |
Check out your portfolio center.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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