Correlation Between Monroe Capital and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and Fidus Investment 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 Fidus Investment 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 Fidus Investment Corp, you can compare the effects of market volatilities on Monroe Capital and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and Fidus Investment.
Diversification Opportunities for Monroe Capital and Fidus Investment
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Monroe and Fidus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Monroe Capital i.e., Monroe Capital and Fidus Investment go up and down completely randomly.
Pair Corralation between Monroe Capital and Fidus Investment
Given the investment horizon of 90 days Monroe Capital Corp is expected to under-perform the Fidus Investment. In addition to that, Monroe Capital is 1.55 times more volatile than Fidus Investment Corp. It trades about -0.03 of its total potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.32 per unit of volatility. If you would invest 2,131 in Fidus Investment Corp on November 2, 2024 and sell it today you would earn a total of 112.00 from holding Fidus Investment Corp or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monroe Capital Corp vs. Fidus Investment Corp
Performance |
| Timeline |
| Monroe Capital Corp |
| Fidus Investment Corp |
Monroe Capital and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and Fidus Investment
The main advantage of trading using opposite Monroe Capital and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment'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 |
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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