Correlation Between LendingClub Corp and Better Home
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Better Home 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 Better Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Better Home Finance, you can compare the effects of market volatilities on LendingClub Corp and Better Home 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 Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Better Home.
Diversification Opportunities for LendingClub Corp and Better Home
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LendingClub and Better is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance 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 Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Better Home go up and down completely randomly.
Pair Corralation between LendingClub Corp and Better Home
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 0.25 times more return on investment than Better Home. However, LendingClub Corp is 4.07 times less risky than Better Home. It trades about 0.05 of its potential returns per unit of risk. Better Home Finance is currently generating about 0.01 per unit of risk. If you would invest 946.00 in LendingClub Corp on August 29, 2024 and sell it today you would earn a total of 688.00 from holding LendingClub Corp or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Better Home Finance
Performance |
| Timeline |
| LendingClub Corp |
| Better Home Finance |
LendingClub Corp and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Better Home
The main advantage of trading using opposite LendingClub Corp and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's 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 |
| Better Home vs. ON Semiconductor | Better Home vs. Lincoln Electric Holdings | Better Home vs. Edgewell Personal Care | Better Home vs. Entegris |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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