Correlation Between LendingClub Corp and Equitable Holdings
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Equitable Holdings 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 Equitable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Equitable Holdings, you can compare the effects of market volatilities on LendingClub Corp and Equitable Holdings 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 Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Equitable Holdings.
Diversification Opportunities for LendingClub Corp and Equitable Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LendingClub and Equitable is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings 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 Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Equitable Holdings go up and down completely randomly.
Pair Corralation between LendingClub Corp and Equitable Holdings
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 4.0 times more return on investment than Equitable Holdings. However, LendingClub Corp is 4.0 times more volatile than Equitable Holdings. It trades about 0.08 of its potential returns per unit of risk. Equitable Holdings is currently generating about 0.03 per unit of risk. If you would invest 801.00 in LendingClub Corp on November 9, 2024 and sell it today you would earn a total of 563.00 from holding LendingClub Corp or generate 70.29% 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. Equitable Holdings
Performance |
| Timeline |
| LendingClub Corp |
| Equitable Holdings |
LendingClub Corp and Equitable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Equitable Holdings
The main advantage of trading using opposite LendingClub Corp and Equitable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Equitable Holdings 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 Equitable Holdings will offset losses from the drop in Equitable Holdings' 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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