Correlation Between Qudian and LendingClub Corp
Can any of the company-specific risk be diversified away by investing in both Qudian and LendingClub Corp 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 Qudian and LendingClub Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and LendingClub Corp, you can compare the effects of market volatilities on Qudian and LendingClub Corp 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 Qudian with a short position of LendingClub Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and LendingClub Corp.
Diversification Opportunities for Qudian and LendingClub Corp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qudian and LendingClub is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and Qudian 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 Qudian Inc are associated (or correlated) with LendingClub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingClub Corp has no effect on the direction of Qudian i.e., Qudian and LendingClub Corp go up and down completely randomly.
Pair Corralation between Qudian and LendingClub Corp
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 1.14 times more return on investment than LendingClub Corp. However, Qudian is 1.14 times more volatile than LendingClub Corp. It trades about 0.08 of its potential returns per unit of risk. LendingClub Corp is currently generating about 0.05 per unit of risk. If you would invest 88.00 in Qudian Inc on August 29, 2024 and sell it today you would earn a total of 216.00 from holding Qudian Inc or generate 245.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. LendingClub Corp
Performance |
| Timeline |
| Qudian Inc |
| LendingClub Corp |
Qudian and LendingClub Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and LendingClub Corp
The main advantage of trading using opposite Qudian and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, LendingClub Corp 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 LendingClub Corp will offset losses from the drop in LendingClub Corp's long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| LendingClub Corp vs. Visa Class A | LendingClub Corp vs. Mastercard | LendingClub Corp vs. Discover Financial Services |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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