Correlation Between Monroe Capital and Sixth Street
Can any of the company-specific risk be diversified away by investing in both Monroe Capital and Sixth Street 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 Sixth Street 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 Sixth Street Specialty, you can compare the effects of market volatilities on Monroe Capital and Sixth Street 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 Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and Sixth Street.
Diversification Opportunities for Monroe Capital and Sixth Street
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monroe and Sixth is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and Sixth Street Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixth Street Specialty 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 Sixth Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixth Street Specialty has no effect on the direction of Monroe Capital i.e., Monroe Capital and Sixth Street go up and down completely randomly.
Pair Corralation between Monroe Capital and Sixth Street
Given the investment horizon of 90 days Monroe Capital Corp is expected to generate 0.89 times more return on investment than Sixth Street. However, Monroe Capital Corp is 1.13 times less risky than Sixth Street. It trades about 0.41 of its potential returns per unit of risk. Sixth Street Specialty is currently generating about 0.25 per unit of risk. If you would invest 790.00 in Monroe Capital Corp on September 1, 2024 and sell it today you would earn a total of 62.00 from holding Monroe Capital Corp or generate 7.85% 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. Sixth Street Specialty
Performance |
| Timeline |
| Monroe Capital Corp |
| Sixth Street Specialty |
Monroe Capital and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monroe Capital and Sixth Street
The main advantage of trading using opposite Monroe Capital and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, Sixth Street 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 Sixth Street will offset losses from the drop in Sixth Street'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 |
| Sixth Street vs. Visa Class A | Sixth Street vs. Diamond Hill Investment | Sixth Street vs. Distoken Acquisition | Sixth Street vs. Associated Capital Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |