Correlation Between Carlyle Secured and Monroe Capital

Can any of the company-specific risk be diversified away by investing in both Carlyle Secured 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 Carlyle Secured and Monroe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Secured Lending and Monroe Capital Corp, you can compare the effects of market volatilities on Carlyle Secured 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 Carlyle Secured with a short position of Monroe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Monroe Capital.

Diversification Opportunities for Carlyle Secured and Monroe Capital

0.52

Correlation Coefficient

Carlyle Secured  Monroe Capital

Very weak diversification

The 3 months correlation between Carlyle and Monroe is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending 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 Carlyle Secured 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 Carlyle Secured Lending 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 Carlyle Secured i.e., Carlyle Secured and Monroe Capital go up and down completely randomly.

Pair Corralation between Carlyle Secured and Monroe Capital

Given the investment horizon of 90 days Carlyle Secured Lending is expected to under-perform the Monroe Capital. In addition to that, Carlyle Secured is 2.17 times more volatile than Monroe Capital Corp. It trades about -0.13 of its total potential returns per unit of risk. Monroe Capital Corp is currently generating about 0.24 per unit of volatility. If you would invest  855.00  in Monroe Capital Corp on December 1, 2024 and sell it today you would earn a total of  26.00  from holding Monroe Capital Corp or generate 3.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Carlyle Secured Lending  vs.  Monroe Capital Corp

Carlyle Secured Lending

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Monroe Capital Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monroe Capital Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Monroe Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Carlyle Secured and Monroe Capital

The main advantage of trading using opposite Carlyle Secured and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured 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.

The idea behind Carlyle Secured Lending and Monroe Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.