Correlation Between LendingClub Corp and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Invesco Trust 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 Trust 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 Trust For, you can compare the effects of market volatilities on LendingClub Corp and Invesco Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Invesco Trust.
Diversification Opportunities for LendingClub Corp and Invesco Trust
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LendingClub and Invesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Invesco Trust go up and down completely randomly.
Pair Corralation between LendingClub Corp and Invesco Trust
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 5.93 times more return on investment than Invesco Trust. However, LendingClub Corp is 5.93 times more volatile than Invesco Trust For. It trades about 0.17 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.05 per unit of risk. If you would invest 1,215 in LendingClub Corp on August 30, 2024 and sell it today you would earn a total of 434.00 from holding LendingClub Corp or generate 35.72% 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 Trust For
Performance |
| Timeline |
| LendingClub Corp |
| Invesco Trust For |
LendingClub Corp and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Invesco Trust
The main advantage of trading using opposite LendingClub Corp and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Invesco Trust 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 Trust will offset losses from the drop in Invesco Trust's 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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