Correlation Between Top KingWin and Monroe Capital

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

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

Diversification Opportunities for Top KingWin and Monroe Capital

0.75

Correlation Coefficient

Top KingWin  Monroe Capital

Poor diversification

The 3 months correlation between Top and Monroe is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Top KingWin Ltd 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 Top KingWin 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 Top KingWin Ltd 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 Top KingWin i.e., Top KingWin and Monroe Capital go up and down completely randomly.

Pair Corralation between Top KingWin and Monroe Capital

Given the investment horizon of 90 days Top KingWin Ltd is expected to generate 5.39 times more return on investment than Monroe Capital. However, Top KingWin is 5.39 times more volatile than Monroe Capital Corp. It trades about 0.28 of its potential returns per unit of risk. Monroe Capital Corp is currently generating about 0.12 per unit of risk. If you would invest  31.00  in Top KingWin Ltd on July 18, 2024 and sell it today you would earn a total of  19.00  from holding Top KingWin Ltd or generate 61.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Top KingWin Ltd  vs.  Monroe Capital Corp

Top KingWin

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Top KingWin Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward-looking indicators, Top KingWin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Top KingWin and Monroe Capital

The main advantage of trading using opposite Top KingWin and Monroe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top KingWin 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 Top KingWin Ltd 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.