Correlation Between LendingClub Corp and Enova International
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Enova International 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 Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Enova International, you can compare the effects of market volatilities on LendingClub Corp and Enova International 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 Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Enova International.
Diversification Opportunities for LendingClub Corp and Enova International
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LendingClub and Enova is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Enova International go up and down completely randomly.
Pair Corralation between LendingClub Corp and Enova International
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 1.78 times more return on investment than Enova International. However, LendingClub Corp is 1.78 times more volatile than Enova International. It trades about 0.14 of its potential returns per unit of risk. Enova International is currently generating about 0.18 per unit of risk. If you would invest 549.00 in LendingClub Corp on February 6, 2024 and sell it today you would earn a total of 377.00 from holding LendingClub Corp or generate 68.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Enova International
Performance |
| Timeline |
| LendingClub Corp |
| Enova International |
LendingClub Corp and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Enova International
The main advantage of trading using opposite LendingClub Corp and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| LendingClub Corp vs. Visa Class A | LendingClub Corp vs. Diamond Hill Investment | LendingClub Corp vs. Distoken Acquisition | LendingClub Corp vs. AllianceBernstein Holding LP |
| Enova International vs. Visa Class A | Enova International vs. Diamond Hill Investment | Enova International vs. Distoken Acquisition | Enova International vs. AllianceBernstein Holding LP |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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