Correlation Between LendingClub Corp and Western Union
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Western Union 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 Union 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 Union Co, you can compare the effects of market volatilities on LendingClub Corp and Western Union 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 Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Western Union.
Diversification Opportunities for LendingClub Corp and Western Union
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LendingClub and Western is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Western Union go up and down completely randomly.
Pair Corralation between LendingClub Corp and Western Union
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 2.72 times more return on investment than Western Union. However, LendingClub Corp is 2.72 times more volatile than Western Union Co. It trades about 0.3 of its potential returns per unit of risk. Western Union Co is currently generating about -0.03 per unit of risk. If you would invest 1,359 in LendingClub Corp on August 26, 2024 and sell it today you would earn a total of 314.00 from holding LendingClub Corp or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Western Union Co
Performance |
| Timeline |
| LendingClub Corp |
| Western Union |
LendingClub Corp and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Western Union
The main advantage of trading using opposite LendingClub Corp and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Western Union 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 Union will offset losses from the drop in Western Union's long position.| LendingClub Corp vs. SLM Corp | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash | LendingClub Corp vs. Medallion Financial Corp |
| Western Union vs. American Express | Western Union vs. Morningstar Unconstrained Allocation | Western Union vs. Sitka Gold Corp | Western Union vs. MSCI ACWI exAUCONSUMER |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets |