Correlation Between LendingClub Corp and Franklin Resources
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Franklin Resources 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 Franklin Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Franklin Resources, you can compare the effects of market volatilities on LendingClub Corp and Franklin Resources 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 Franklin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Franklin Resources.
Diversification Opportunities for LendingClub Corp and Franklin Resources
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LendingClub and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Franklin Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Resources 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 Franklin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Resources has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Franklin Resources go up and down completely randomly.
Pair Corralation between LendingClub Corp and Franklin Resources
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 1.83 times more return on investment than Franklin Resources. However, LendingClub Corp is 1.83 times more volatile than Franklin Resources. It trades about 0.06 of its potential returns per unit of risk. Franklin Resources is currently generating about 0.0 per unit of risk. If you would invest 964.00 in LendingClub Corp on August 28, 2024 and sell it today you would earn a total of 694.00 from holding LendingClub Corp or generate 71.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Franklin Resources
Performance |
| Timeline |
| LendingClub Corp |
| Franklin Resources |
LendingClub Corp and Franklin Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Franklin Resources
The main advantage of trading using opposite LendingClub Corp and Franklin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Franklin Resources 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 Franklin Resources will offset losses from the drop in Franklin Resources' long position.| LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. Medallion Financial Corp | LendingClub Corp vs. Oportun Financial Corp | LendingClub Corp vs. SLM Corp Pb |
| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |