Correlation Between Monroe Capital and John Hancock
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and John Hancock 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 John Hancock 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 John Hancock Income, you can compare the effects of market volatilities on Monroe Capital and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and John Hancock.
Diversification Opportunities for Monroe Capital and John Hancock
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monroe and John is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Income has no effect on the direction of Monroe Capital i.e., Monroe Capital and John Hancock go up and down completely randomly.
Pair Corralation between Monroe Capital and John Hancock
Given the investment horizon of 90 days Monroe Capital Corp is expected to generate 2.06 times more return on investment than John Hancock. However, Monroe Capital is 2.06 times more volatile than John Hancock Income. It trades about 0.24 of its potential returns per unit of risk. John Hancock Income is currently generating about -0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monroe Capital Corp vs. John Hancock Income
Performance |
| Timeline |
| Monroe Capital Corp |
| John Hancock Income |
Monroe Capital and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and John Hancock
The main advantage of trading using opposite Monroe Capital and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock'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 |
| John Hancock vs. PowerUp Acquisition Corp | John Hancock vs. Aurora Innovation | John Hancock vs. HUMANA INC | John Hancock 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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