Correlation Between Triplepoint Venture and Monroe Capital

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

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

Diversification Opportunities for Triplepoint Venture and Monroe Capital

0.79

Correlation Coefficient

Triplepoint Venture  Monroe Capital

Poor diversification

The 3 months correlation between Triplepoint and Monroe is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Triplepoint Venture Growth 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 Triplepoint Venture 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 Triplepoint Venture Growth 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 Triplepoint Venture i.e., Triplepoint Venture and Monroe Capital go up and down completely randomly.

Pair Corralation between Triplepoint Venture and Monroe Capital

Given the investment horizon of 90 days Triplepoint Venture Growth is expected to generate 1.2 times more return on investment than Monroe Capital. However, Triplepoint Venture is 1.2 times more volatile than Monroe Capital Corp. It trades about 0.03 of its potential returns per unit of risk. Monroe Capital Corp is currently generating about -0.05 per unit of risk. 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

Triplepoint Venture Growth  vs.  Monroe Capital Corp

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.

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.

Pair Trading with Triplepoint Venture and Monroe Capital

The main advantage of trading using opposite Triplepoint Venture and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triplepoint Venture 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 Triplepoint Venture Growth 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.