Correlation Between Monroe Capital and New Mountain
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and New Mountain 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 New Mountain 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 New Mountain Finance, you can compare the effects of market volatilities on Monroe Capital and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and New Mountain.
Diversification Opportunities for Monroe Capital and New Mountain
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monroe and New is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Monroe Capital i.e., Monroe Capital and New Mountain go up and down completely randomly.
Pair Corralation between Monroe Capital and New Mountain
Given the investment horizon of 90 days Monroe Capital Corp is expected to generate 1.92 times more return on investment than New Mountain. However, Monroe Capital is 1.92 times more volatile than New Mountain Finance. It trades about 0.03 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.04 per unit of risk. If you would invest 682.00 in Monroe Capital Corp on August 27, 2024 and sell it today you would earn a total of 159.00 from holding Monroe Capital Corp or generate 23.31% 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. New Mountain Finance
Performance |
| Timeline |
| Monroe Capital Corp |
| New Mountain Finance |
Monroe Capital and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and New Mountain
The main advantage of trading using opposite Monroe Capital and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain'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 |
| New Mountain vs. PowerUp Acquisition Corp | New Mountain vs. Aurora Innovation | New Mountain vs. HUMANA INC | New Mountain 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |