Correlation Between Marsico Growth and Century Small
Can any of the company-specific risk be diversified away by investing in both Marsico Growth and Century Small 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 Century Small 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 Century Small Cap, you can compare the effects of market volatilities on Marsico Growth and Century Small 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 Century Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Growth and Century Small.
Diversification Opportunities for Marsico Growth and Century Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Marsico and Century is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Growth Fund and Century Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Small Cap 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 Century Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Small Cap has no effect on the direction of Marsico Growth i.e., Marsico Growth and Century Small go up and down completely randomly.
Pair Corralation between Marsico Growth and Century Small
Assuming the 90 days horizon Marsico Growth Fund is expected to generate 0.95 times more return on investment than Century Small. However, Marsico Growth Fund is 1.06 times less risky than Century Small. It trades about 0.14 of its potential returns per unit of risk. Century Small Cap is currently generating about 0.08 per unit of risk. If you would invest 1,408 in Marsico Growth Fund on September 12, 2024 and sell it today you would earn a total of 1,465 from holding Marsico Growth Fund or generate 104.05% 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. Century Small Cap
Performance |
| Timeline |
| Marsico Growth |
| Century Small Cap |
Marsico Growth and Century Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsico Growth and Century Small
The main advantage of trading using opposite Marsico Growth and Century Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Growth position performs unexpectedly, Century Small 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 Century Small will offset losses from the drop in Century Small'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 |
| Century Small vs. Third Avenue Real | Century Small vs. Aegis Value Fund | Century Small vs. Litman Gregory Masters | Century Small vs. Marsico Growth 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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