Correlation Between LendingClub Corp and EZCORP
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and EZCORP 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 EZCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and EZCORP Inc, you can compare the effects of market volatilities on LendingClub Corp and EZCORP 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 EZCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and EZCORP.
Diversification Opportunities for LendingClub Corp and EZCORP
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between LendingClub and EZCORP is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc 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 EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and EZCORP go up and down completely randomly.
Pair Corralation between LendingClub Corp and EZCORP
Allowing for the 90-day total investment horizon LendingClub Corp is expected to under-perform the EZCORP. In addition to that, LendingClub Corp is 1.62 times more volatile than EZCORP Inc. It trades about -0.02 of its total potential returns per unit of risk. EZCORP Inc is currently generating about 0.06 per unit of volatility. If you would invest 686.00 in EZCORP Inc on January 20, 2024 and sell it today you would earn a total of 434.00 from holding EZCORP Inc or generate 63.27% 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. EZCORP Inc
Performance |
| Timeline |
| LendingClub Corp |
| EZCORP Inc |
LendingClub Corp and EZCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and EZCORP
The main advantage of trading using opposite LendingClub Corp and EZCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, EZCORP 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 EZCORP will offset losses from the drop in EZCORP's long position.| LendingClub Corp vs. Visa Class A | LendingClub Corp vs. PayPal Holdings | LendingClub Corp vs. Mastercard |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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