Correlation Between Monroe Capital and Jupai Holdings

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

Diversification Opportunities for Monroe Capital and Jupai Holdings

-0.53

Correlation Coefficient

Monroe Capital  Jupai Holdings

Excellent diversification

The 3 months correlation between Monroe and Jupai is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Monroe Capital Corp and Jupai Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupai Holdings 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 Jupai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupai Holdings has no effect on the direction of Monroe Capital i.e., Monroe Capital and Jupai Holdings go up and down completely randomly.

Pair Corralation between Monroe Capital and Jupai Holdings

If you would invest  785.00  in Monroe Capital Corp on July 18, 2024 and sell it today you would earn a total of  31.00  from holding Monroe Capital Corp or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Monroe Capital Corp  vs.  Jupai Holdings Limited

Monroe Capital Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monroe Capital Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Monroe Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jupai Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupai Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jupai Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monroe Capital and Jupai Holdings

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

The idea behind Monroe Capital Corp and Jupai Holdings Limited 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.