Correlation Between LendingClub Corp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Dow Jones Industrial, you can compare the effects of market volatilities on LendingClub Corp and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Dow Jones.
Diversification Opportunities for LendingClub Corp and Dow Jones
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LendingClub and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Dow Jones go up and down completely randomly.
Pair Corralation between LendingClub Corp and Dow Jones
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 3.35 times more return on investment than Dow Jones. However, LendingClub Corp is 3.35 times more volatile than Dow Jones Industrial. It trades about 0.23 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Dow Jones Industrial
Performance |
| Timeline |
LendingClub Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
LendingClub Corp
Pair trading matchups for LendingClub Corp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with LendingClub Corp and Dow Jones
The main advantage of trading using opposite LendingClub Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| LendingClub Corp vs. SLM Corp | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash | LendingClub Corp vs. Medallion Financial Corp |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |