Correlation Between LendingClub Corp and Solowin Holdings
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Solowin 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 Solowin 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 Solowin Holdings Ordinary, you can compare the effects of market volatilities on LendingClub Corp and Solowin 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 Solowin Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Solowin Holdings.
Diversification Opportunities for LendingClub Corp and Solowin Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LendingClub and Solowin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Solowin Holdings Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solowin Holdings Ordinary 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 Solowin Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solowin Holdings Ordinary has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Solowin Holdings go up and down completely randomly.
Pair Corralation between LendingClub Corp and Solowin Holdings
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 4.23 times less return on investment than Solowin Holdings. But when comparing it to its historical volatility, LendingClub Corp is 4.03 times less risky than Solowin Holdings. It trades about 0.05 of its potential returns per unit of risk. Solowin Holdings Ordinary is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Solowin Holdings Ordinary on September 2, 2024 and sell it today you would lose (351.00) from holding Solowin Holdings Ordinary or give up 57.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.9% |
| Values | Daily Returns |
LendingClub Corp vs. Solowin Holdings Ordinary
Performance |
| Timeline |
| LendingClub Corp |
| Solowin Holdings Ordinary |
LendingClub Corp and Solowin Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Solowin Holdings
The main advantage of trading using opposite LendingClub Corp and Solowin Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Solowin 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 Solowin Holdings will offset losses from the drop in Solowin 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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