Correlation Between Marsico Focus and Selected American
Can any of the company-specific risk be diversified away by investing in both Marsico Focus and Selected American 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 Selected American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marsico Focus Fund and Selected American Shares, you can compare the effects of market volatilities on Marsico Focus and Selected American 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 Selected American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Focus and Selected American.
Diversification Opportunities for Marsico Focus and Selected American
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marsico and Selected is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus Fund and Selected American Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected American Shares 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 Fund are associated (or correlated) with Selected American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected American Shares has no effect on the direction of Marsico Focus i.e., Marsico Focus and Selected American go up and down completely randomly.
Pair Corralation between Marsico Focus and Selected American
Assuming the 90 days horizon Marsico Focus Fund is expected to generate 1.03 times more return on investment than Selected American. However, Marsico Focus is 1.03 times more volatile than Selected American Shares. It trades about 0.12 of its potential returns per unit of risk. Selected American Shares is currently generating about 0.03 per unit of risk. If you would invest 1,604 in Marsico Focus Fund on November 5, 2024 and sell it today you would earn a total of 1,463 from holding Marsico Focus Fund or generate 91.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marsico Focus Fund vs. Selected American Shares
Performance |
| Timeline |
| Marsico Focus |
| Selected American Shares |
Marsico Focus and Selected American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsico Focus and Selected American
The main advantage of trading using opposite Marsico Focus and Selected American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Focus position performs unexpectedly, Selected American 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 Selected American will offset losses from the drop in Selected American's long position.| Marsico Focus vs. Marsico Growth Fund | Marsico Focus vs. T Rowe Price | Marsico Focus vs. Short Term Fund Administrative | Marsico Focus vs. Selected American Shares |
| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. Oakmark Select Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |