Correlation Between Nuveen Preferred and Monroe Capital

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

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

Diversification Opportunities for Nuveen Preferred and Monroe Capital

0.0

Correlation Coefficient

Nuveen Preferred  Monroe Capital

Pay attention - limited upside

The 3 months correlation between Nuveen and Monroe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred And 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 Nuveen Preferred 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 Nuveen Preferred And 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 Nuveen Preferred i.e., Nuveen Preferred and Monroe Capital go up and down completely randomly.

Pair Corralation between Nuveen Preferred and Monroe Capital

If you would invest  779.00  in Monroe Capital Corp on December 19, 2024 and sell it today you would earn a total of  12.00  from holding Monroe Capital Corp or generate 1.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nuveen Preferred And  vs.  Monroe Capital Corp

Nuveen Preferred And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Preferred And has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Nuveen Preferred is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Monroe Capital Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monroe Capital Corp are ranked lower than 2 (%) 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 Nuveen Preferred and Monroe Capital

The main advantage of trading using opposite Nuveen Preferred and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred 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 Nuveen Preferred And 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.