Correlation Between LendingClub Corp and Invesco Quality
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Invesco Quality 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 Invesco Quality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Invesco Quality Municipal, you can compare the effects of market volatilities on LendingClub Corp and Invesco Quality 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 Invesco Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Invesco Quality.
Diversification Opportunities for LendingClub Corp and Invesco Quality
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LendingClub and Invesco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Invesco Quality Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Quality Municipal 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 Invesco Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Quality Municipal has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Invesco Quality go up and down completely randomly.
Pair Corralation between LendingClub Corp and Invesco Quality
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 5.96 times more return on investment than Invesco Quality. However, LendingClub Corp is 5.96 times more volatile than Invesco Quality Municipal. It trades about 0.34 of its potential returns per unit of risk. Invesco Quality Municipal is currently generating about -0.11 per unit of risk. If you would invest 1,058 in LendingClub Corp on August 26, 2024 and sell it today you would earn a total of 615.00 from holding LendingClub Corp or generate 58.13% 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. Invesco Quality Municipal
Performance |
| Timeline |
| LendingClub Corp |
| Invesco Quality Municipal |
LendingClub Corp and Invesco Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Invesco Quality
The main advantage of trading using opposite LendingClub Corp and Invesco Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Invesco Quality 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 Invesco Quality will offset losses from the drop in Invesco Quality's long position.| LendingClub Corp vs. SLM Corp | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash | LendingClub Corp vs. Medallion Financial Corp |
| Invesco Quality vs. PowerUp Acquisition Corp | Invesco Quality vs. Aurora Innovation | Invesco Quality vs. HUMANA INC | Invesco Quality vs. Aquagold International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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