Correlation Between LendingClub Corp and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and AFC Gamma 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 AFC Gamma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and AFC Gamma, you can compare the effects of market volatilities on LendingClub Corp and AFC Gamma 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 AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and AFC Gamma.
Diversification Opportunities for LendingClub Corp and AFC Gamma
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LendingClub and AFC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma 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 AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and AFC Gamma go up and down completely randomly.
Pair Corralation between LendingClub Corp and AFC Gamma
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 1.68 times more return on investment than AFC Gamma. However, LendingClub Corp is 1.68 times more volatile than AFC Gamma. It trades about 0.04 of its potential returns per unit of risk. AFC Gamma is currently generating about 0.02 per unit of risk. If you would invest 1,000.00 in LendingClub Corp on November 2, 2024 and sell it today you would earn a total of 385.00 from holding LendingClub Corp or generate 38.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. AFC Gamma
Performance |
| Timeline |
| LendingClub Corp |
| AFC Gamma |
LendingClub Corp and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and AFC Gamma
The main advantage of trading using opposite LendingClub Corp and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| LendingClub Corp vs. Navient Corp | LendingClub Corp vs. Green Dot | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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