Correlation Between Monroe Capital and Great Elm
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and Great Elm 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 Great Elm 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 Great Elm Group, you can compare the effects of market volatilities on Monroe Capital and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and Great Elm.
Diversification Opportunities for Monroe Capital and Great Elm
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monroe and Great is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and Great Elm Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Group 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Group has no effect on the direction of Monroe Capital i.e., Monroe Capital and Great Elm go up and down completely randomly.
Pair Corralation between Monroe Capital and Great Elm
Given the investment horizon of 90 days Monroe Capital Corp is expected to generate 0.75 times more return on investment than Great Elm. However, Monroe Capital Corp is 1.34 times less risky than Great Elm. It trades about 0.09 of its potential returns per unit of risk. Great Elm Group is currently generating about 0.0 per unit of risk. If you would invest 634.00 in Monroe Capital Corp on November 9, 2024 and sell it today you would earn a total of 223.00 from holding Monroe Capital Corp or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monroe Capital Corp vs. Great Elm Group
Performance |
| Timeline |
| Monroe Capital Corp |
| Great Elm Group |
Monroe Capital and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and Great Elm
The main advantage of trading using opposite Monroe Capital and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 |
| Great Elm vs. Investcorp Credit Management | Great Elm vs. Monroe Capital Corp | Great Elm vs. Allianzgi Convertible Income | Great Elm vs. John Hancock Income |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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