Correlation Between Marsico Growth and Small Cap
Can any of the company-specific risk be diversified away by investing in both Marsico Growth and Small Cap 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 Growth and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marsico Growth Fund and Small Cap Growth, you can compare the effects of market volatilities on Marsico Growth and Small Cap 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 Growth with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Growth and Small Cap.
Diversification Opportunities for Marsico Growth and Small Cap
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marsico and Small is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Growth Fund and Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth and Marsico Growth 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 Growth Fund are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Marsico Growth i.e., Marsico Growth and Small Cap go up and down completely randomly.
Pair Corralation between Marsico Growth and Small Cap
Assuming the 90 days horizon Marsico Growth Fund is expected to generate 0.87 times more return on investment than Small Cap. However, Marsico Growth Fund is 1.15 times less risky than Small Cap. It trades about 0.18 of its potential returns per unit of risk. Small Cap Growth is currently generating about 0.11 per unit of risk. If you would invest 2,716 in Marsico Growth Fund on September 13, 2024 and sell it today you would earn a total of 204.00 from holding Marsico Growth Fund or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marsico Growth Fund vs. Small Cap Growth
Performance |
| Timeline |
| Marsico Growth |
| Small Cap Growth |
Marsico Growth and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsico Growth and Small Cap
The main advantage of trading using opposite Marsico Growth and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Growth position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Marsico Growth vs. Marsico Focus Fund | Marsico Growth vs. Marsico International Opportunities | Marsico Growth vs. Marsico 21st Century | Marsico Growth vs. Selected American Shares |
| Small Cap vs. Focused Dynamic Growth | Small Cap vs. Heritage Fund Investor | Small Cap vs. Emerging Markets Fund | Small Cap vs. Small Cap Value |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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