Correlation Between LendingClub Corp and PJT Partners
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and PJT Partners 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 PJT Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and PJT Partners, you can compare the effects of market volatilities on LendingClub Corp and PJT Partners 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 PJT Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and PJT Partners.
Diversification Opportunities for LendingClub Corp and PJT Partners
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LendingClub and PJT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners 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 PJT Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJT Partners has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and PJT Partners go up and down completely randomly.
Pair Corralation between LendingClub Corp and PJT Partners
Allowing for the 90-day total investment horizon LendingClub Corp is expected to under-perform the PJT Partners. In addition to that, LendingClub Corp is 2.33 times more volatile than PJT Partners. It trades about -0.11 of its total potential returns per unit of risk. PJT Partners is currently generating about 0.14 per unit of volatility. If you would invest 15,658 in PJT Partners on November 2, 2024 and sell it today you would earn a total of 827.00 from holding PJT Partners or generate 5.28% 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. PJT Partners
Performance |
| Timeline |
| LendingClub Corp |
| PJT Partners |
LendingClub Corp and PJT Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and PJT Partners
The main advantage of trading using opposite LendingClub Corp and PJT Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, PJT Partners 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 PJT Partners will offset losses from the drop in PJT Partners' long position.| LendingClub Corp vs. Visa Class A | LendingClub Corp vs. PayPal Holdings | LendingClub Corp vs. Mastercard |
| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners vs. Moelis Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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