Correlation Between Monroe Capital and Triplepoint Venture

Can any of the company-specific risk be diversified away by investing in both Monroe Capital and Triplepoint Venture 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 Triplepoint Venture 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 Triplepoint Venture Growth, you can compare the effects of market volatilities on Monroe Capital and Triplepoint Venture 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 Triplepoint Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monroe Capital and Triplepoint Venture.

Diversification Opportunities for Monroe Capital and Triplepoint Venture

0.79

Correlation Coefficient

Monroe Capital  Triplepoint Venture

Poor diversification

The 3 months correlation between Monroe and Triplepoint is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and Triplepoint Venture Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triplepoint Venture 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 Triplepoint Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triplepoint Venture has no effect on the direction of Monroe Capital i.e., Monroe Capital and Triplepoint Venture go up and down completely randomly.

Pair Corralation between Monroe Capital and Triplepoint Venture

Given the investment horizon of 90 days Monroe Capital Corp is expected to under-perform the Triplepoint Venture. But the stock apears to be less risky and, when comparing its historical volatility, Monroe Capital Corp is 1.2 times less risky than Triplepoint Venture. The stock trades about -0.05 of its potential returns per unit of risk. The Triplepoint Venture Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  694.00  in Triplepoint Venture Growth on December 30, 2024 and sell it today you would earn a total of  15.00  from holding Triplepoint Venture Growth or generate 2.16% return on investment over 90 days.

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

Monroe Capital Corp  vs.  Triplepoint Venture Growth

Monroe Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monroe Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Triplepoint Venture

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triplepoint Venture Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Triplepoint Venture is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Monroe Capital and Triplepoint Venture

The main advantage of trading using opposite Monroe Capital and Triplepoint Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monroe Capital position performs unexpectedly, Triplepoint Venture 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 Triplepoint Venture will offset losses from the drop in Triplepoint Venture's long position.

The idea behind Monroe Capital Corp and Triplepoint Venture Growth 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.