Correlation Between LendingClub Corp and Western Asset
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Western Asset Diversified, you can compare the effects of market volatilities on LendingClub Corp and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Western Asset.
Diversification Opportunities for LendingClub Corp and Western Asset
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LendingClub and Western is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Western Asset go up and down completely randomly.
Pair Corralation between LendingClub Corp and Western Asset
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 5.02 times more return on investment than Western Asset. However, LendingClub Corp is 5.02 times more volatile than Western Asset Diversified. It trades about 0.3 of its potential returns per unit of risk. Western Asset Diversified is currently generating about -0.11 per unit of risk. If you would invest 1,246 in LendingClub Corp on August 24, 2024 and sell it today you would earn a total of 344.00 from holding LendingClub Corp or generate 27.61% 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. Western Asset Diversified
Performance |
| Timeline |
| LendingClub Corp |
| Western Asset Diversified |
LendingClub Corp and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Western Asset
The main advantage of trading using opposite LendingClub Corp and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| LendingClub Corp vs. Navient Corp | LendingClub Corp vs. Green Dot | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash |
| Western Asset vs. Neuberger Berman Next | Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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