Correlation Between LendingClub Corp and MFS Charter
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and MFS Charter 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 MFS Charter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and MFS Charter Income, you can compare the effects of market volatilities on LendingClub Corp and MFS Charter 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 MFS Charter. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and MFS Charter.
Diversification Opportunities for LendingClub Corp and MFS Charter
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LendingClub and MFS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and MFS Charter Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Charter Income 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 MFS Charter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Charter Income has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and MFS Charter go up and down completely randomly.
Pair Corralation between LendingClub Corp and MFS Charter
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 6.94 times more return on investment than MFS Charter. However, LendingClub Corp is 6.94 times more volatile than MFS Charter Income. It trades about 0.23 of its potential returns per unit of risk. MFS Charter Income is currently generating about -0.01 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. MFS Charter Income
Performance |
| Timeline |
| LendingClub Corp |
| MFS Charter Income |
LendingClub Corp and MFS Charter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and MFS Charter
The main advantage of trading using opposite LendingClub Corp and MFS Charter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, MFS Charter 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 MFS Charter will offset losses from the drop in MFS Charter's long position.| LendingClub Corp vs. SLM Corp | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash | LendingClub Corp vs. Medallion Financial Corp |
| MFS Charter vs. MFS High Income | MFS Charter vs. MFS Investment Grade | MFS Charter vs. Eaton Vance National | MFS Charter vs. Invesco High Income |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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