Correlation Between LendingClub Corp and FirstCash
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and FirstCash 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 FirstCash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and FirstCash, you can compare the effects of market volatilities on LendingClub Corp and FirstCash 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 FirstCash. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and FirstCash.
Diversification Opportunities for LendingClub Corp and FirstCash
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between LendingClub and FirstCash is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash 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 FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and FirstCash go up and down completely randomly.
Pair Corralation between LendingClub Corp and FirstCash
Allowing for the 90-day total investment horizon LendingClub Corp is expected to under-perform the FirstCash. In addition to that, LendingClub Corp is 1.91 times more volatile than FirstCash. It trades about -0.05 of its total potential returns per unit of risk. FirstCash is currently generating about 0.26 per unit of volatility. If you would invest 12,385 in FirstCash on January 26, 2024 and sell it today you would earn a total of 818.00 from holding FirstCash or generate 6.6% 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. FirstCash
Performance |
| Timeline |
| LendingClub Corp |
| FirstCash |
LendingClub Corp and FirstCash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and FirstCash
The main advantage of trading using opposite LendingClub Corp and FirstCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, FirstCash 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 FirstCash will offset losses from the drop in FirstCash's long position.| LendingClub Corp vs. Navient Corp | LendingClub Corp vs. Green Dot | LendingClub Corp vs. Orix Corp Ads | LendingClub Corp vs. FirstCash |
| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash vs. Medallion Financial Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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