Correlation Between DMY Squared and LendingClub Corp
Can any of the company-specific risk be diversified away by investing in both DMY Squared and LendingClub Corp 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 DMY Squared and LendingClub Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dMY Squared Technology and LendingClub Corp, you can compare the effects of market volatilities on DMY Squared and LendingClub Corp 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 DMY Squared with a short position of LendingClub Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMY Squared and LendingClub Corp.
Diversification Opportunities for DMY Squared and LendingClub Corp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DMY and LendingClub is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and DMY Squared 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 dMY Squared Technology are associated (or correlated) with LendingClub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingClub Corp has no effect on the direction of DMY Squared i.e., DMY Squared and LendingClub Corp go up and down completely randomly.
Pair Corralation between DMY Squared and LendingClub Corp
Given the investment horizon of 90 days DMY Squared is expected to generate 42.73 times less return on investment than LendingClub Corp. But when comparing it to its historical volatility, dMY Squared Technology is 12.06 times less risky than LendingClub Corp. It trades about 0.07 of its potential returns per unit of risk. LendingClub Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,423 in LendingClub Corp on August 28, 2024 and sell it today you would earn a total of 235.00 from holding LendingClub Corp or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
dMY Squared Technology vs. LendingClub Corp
Performance |
| Timeline |
| dMY Squared Technology |
| LendingClub Corp |
DMY Squared and LendingClub Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMY Squared and LendingClub Corp
The main advantage of trading using opposite DMY Squared and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMY Squared position performs unexpectedly, LendingClub Corp 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 LendingClub Corp will offset losses from the drop in LendingClub Corp's long position.The idea behind dMY Squared Technology and LendingClub 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.| LendingClub Corp vs. SLM Corp | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash | LendingClub Corp vs. Medallion Financial Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |