Correlation Between WhiteHorse Finance and Monroe Capital
Can any of the company-specific risk be diversified away by investing in both WhiteHorse Finance and Monroe Capital 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 WhiteHorse Finance and Monroe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WhiteHorse Finance and Monroe Capital Corp, you can compare the effects of market volatilities on WhiteHorse Finance and Monroe Capital 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 WhiteHorse Finance with a short position of Monroe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WhiteHorse Finance and Monroe Capital.
Diversification Opportunities for WhiteHorse Finance and Monroe Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WhiteHorse and Monroe is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding WhiteHorse Finance and Monroe Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monroe Capital Corp and WhiteHorse Finance 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 WhiteHorse Finance are associated (or correlated) with Monroe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monroe Capital Corp has no effect on the direction of WhiteHorse Finance i.e., WhiteHorse Finance and Monroe Capital go up and down completely randomly.
Pair Corralation between WhiteHorse Finance and Monroe Capital
Considering the 90-day investment horizon WhiteHorse Finance is expected to under-perform the Monroe Capital. In addition to that, WhiteHorse Finance is 1.16 times more volatile than Monroe Capital Corp. It trades about -0.43 of its total potential returns per unit of risk. Monroe Capital Corp is currently generating about 0.21 per unit of volatility. If you would invest 801.00 in Monroe Capital Corp on August 27, 2024 and sell it today you would earn a total of 40.00 from holding Monroe Capital Corp or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WhiteHorse Finance vs. Monroe Capital Corp
Performance |
| Timeline |
| WhiteHorse Finance |
| Monroe Capital Corp |
WhiteHorse Finance and Monroe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WhiteHorse Finance and Monroe Capital
The main advantage of trading using opposite WhiteHorse Finance and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WhiteHorse Finance position performs unexpectedly, Monroe Capital 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 Monroe Capital will offset losses from the drop in Monroe Capital's long position.| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill Investment |
| Monroe Capital vs. WhiteHorse Finance | Monroe Capital vs. OFS Capital Corp | Monroe Capital vs. Fidus Investment Corp | Monroe Capital vs. BlackRock TCP Capital |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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