ARCC vs CSWC: Correlation
Ares Capital Corporation - Closed End Fund (ARCC) and Capital Southwest Corporation (CSWC) show a strong relationship: their 3-year correlation of weekly returns is 0.74.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ARCC and CSWC?
Across a 3-year window, the weekly returns of ARCC and CSWC correlate at 0.74, strong. The relationship has been stable: the 1-year correlation (0.80) sits close to the 3-year figure. Stretching to 5 years gives 0.72, with an annualized covariance of 232.9 %².
Among the 31 assets we track against ARCC, CSWC ranks #11 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months CSWC outperformed by 27.3 percentage points (-1.8% for ARCC against +25.5% for CSWC).
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
ARCC vs CSWC: side by side
| ARCC (Ares Capital Corporation - Closed End Fund) | CSWC (Capital Southwest Corporation) | |
|---|---|---|
| 1-year return | -1.8% | +25.5% |
| 5-year return | +59.8% | +72.3% |
| Volatility (ann.) | 15.8% | 20.0% |
| Beta vs S&P 500 | 0.62 | 0.64 |
| Max drawdown (3Y) | -19.3% | -27.7% |
| Market cap | $14.3B | $1.6B |
| P/E (trailing) | 14.8 | 14.0 |
| Dividend yield | 9.65% | 9.20% |
| Sector / category | US Listed | US Listed |
Year-by-year returns
| Year | ARCC | CSWC |
|---|---|---|
| 2022 | -3.8% | -24.4% |
| 2023 | +20.0% | +56.1% |
| 2024 | +19.8% | +2.1% |
| 2025 | +1.1% | +14.3% |
| 2026 | +3.5% | +23.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are ARCC and CSWC good diversifiers for each other?
Only partially. A correlation of 0.74 means ARCC and CSWC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between ARCC and CSWC?
Using weekly returns as of 2026-08-27: 0.74 over 3 years, with 0.80 over the last year and 0.72 over 5 years.
Is CSWC a good diversifier for ARCC?
Only partially. A correlation of 0.74 means ARCC and CSWC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.74 mean?
A reading of 0.74 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/arcc-vs-cswc.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/arcc-vs-cswc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: ARCC correlations · CSWC correlations
