Correlation Between LendingClub Corp and Associated Capital
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Associated 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 LendingClub Corp and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Associated Capital Group, you can compare the effects of market volatilities on LendingClub Corp and Associated 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 LendingClub Corp with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Associated Capital.
Diversification Opportunities for LendingClub Corp and Associated Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LendingClub and Associated is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and LendingClub Corp 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 LendingClub Corp are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Associated Capital go up and down completely randomly.
Pair Corralation between LendingClub Corp and Associated Capital
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 2.41 times more return on investment than Associated Capital. However, LendingClub Corp is 2.41 times more volatile than Associated Capital Group. It trades about 0.19 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.04 per unit of risk. If you would invest 1,455 in LendingClub Corp on August 31, 2024 and sell it today you would earn a total of 194.00 from holding LendingClub Corp or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Associated Capital Group
Performance |
| Timeline |
| LendingClub Corp |
| Associated Capital |
LendingClub Corp and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Associated Capital
The main advantage of trading using opposite LendingClub Corp and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Associated 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| LendingClub Corp vs. Navient Corp | LendingClub Corp vs. Green Dot | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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