Correlation Between Monroe Capital and MFS High
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and MFS High 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 Monroe Capital and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monroe Capital Corp and MFS High Yield, you can compare the effects of market volatilities on Monroe Capital and MFS High 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 Monroe Capital with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and MFS High.
Diversification Opportunities for Monroe Capital and MFS High
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Monroe and MFS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and MFS High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Yield and Monroe 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 Monroe Capital Corp are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Yield has no effect on the direction of Monroe Capital i.e., Monroe Capital and MFS High go up and down completely randomly.
Pair Corralation between Monroe Capital and MFS High
Given the investment horizon of 90 days Monroe Capital Corp is expected to generate 1.59 times more return on investment than MFS High. However, Monroe Capital is 1.59 times more volatile than MFS High Yield. It trades about 0.24 of its potential returns per unit of risk. MFS High Yield is currently generating about 0.08 per unit of risk. If you would invest 801.00 in Monroe Capital Corp on August 28, 2024 and sell it today you would earn a total of 48.00 from holding Monroe Capital Corp or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monroe Capital Corp vs. MFS High Yield
Performance |
| Timeline |
| Monroe Capital Corp |
| MFS High Yield |
Monroe Capital and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and MFS High
The main advantage of trading using opposite Monroe Capital and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, MFS High 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 MFS High will offset losses from the drop in MFS High's long position.| Monroe Capital vs. WhiteHorse Finance | Monroe Capital vs. OFS Capital Corp | Monroe Capital vs. Fidus Investment Corp | Monroe Capital vs. BlackRock TCP Capital |
| MFS High vs. PowerUp Acquisition Corp | MFS High vs. Aurora Innovation | MFS High vs. HUMANA INC | MFS High vs. Aquagold International |
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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