Correlation Between Associated Capital and Monroe Capital
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Monroe Capital 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 Associated Capital and Monroe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Monroe Capital Corp, you can compare the effects of market volatilities on Associated Capital and Monroe Capital 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 Associated Capital with a short position of Monroe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Monroe Capital.
Diversification Opportunities for Associated Capital and Monroe Capital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Monroe is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Monroe Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monroe Capital Corp and Associated Capital 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 Associated Capital Group are associated (or correlated) with Monroe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monroe Capital Corp has no effect on the direction of Associated Capital i.e., Associated Capital and Monroe Capital go up and down completely randomly.
Pair Corralation between Associated Capital and Monroe Capital
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 3.42 times less return on investment than Monroe Capital. In addition to that, Associated Capital is 1.36 times more volatile than Monroe Capital Corp. It trades about 0.04 of its total potential returns per unit of risk. Monroe Capital Corp is currently generating about 0.2 per unit of volatility. If you would invest 807.00 in Monroe Capital Corp on August 31, 2024 and sell it today you would earn a total of 35.00 from holding Monroe Capital Corp or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Monroe Capital Corp
Performance |
| Timeline |
| Associated Capital |
| Monroe Capital Corp |
Associated Capital and Monroe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Monroe Capital
The main advantage of trading using opposite Associated Capital and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Monroe Capital 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 Monroe Capital will offset losses from the drop in Monroe Capital's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Monroe Capital vs. WhiteHorse Finance | Monroe Capital vs. OFS Capital Corp | Monroe Capital vs. Fidus Investment Corp | Monroe Capital vs. BlackRock TCP Capital |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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