Correlation Between LendingClub Corp and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Lexinfintech Holdings 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 Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Lexinfintech Holdings, you can compare the effects of market volatilities on LendingClub Corp and Lexinfintech Holdings 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 Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Lexinfintech Holdings.
Diversification Opportunities for LendingClub Corp and Lexinfintech Holdings
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between LendingClub and Lexinfintech is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings 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 Lexinfintech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexinfintech Holdings has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between LendingClub Corp and Lexinfintech Holdings
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 0.88 times more return on investment than Lexinfintech Holdings. However, LendingClub Corp is 1.14 times less risky than Lexinfintech Holdings. It trades about -0.01 of its potential returns per unit of risk. Lexinfintech Holdings is currently generating about -0.02 per unit of risk. If you would invest 994.00 in LendingClub Corp on January 24, 2024 and sell it today you would lose (185.00) from holding LendingClub Corp or give up 18.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Lexinfintech Holdings
Performance |
| Timeline |
| LendingClub Corp |
| Lexinfintech Holdings |
LendingClub Corp and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Lexinfintech Holdings
The main advantage of trading using opposite LendingClub Corp and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Lexinfintech Holdings 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 Lexinfintech Holdings will offset losses from the drop in Lexinfintech Holdings' long position.| LendingClub Corp vs. Visa Class A | LendingClub Corp vs. Mastercard | LendingClub Corp vs. Oshidori International Holdings | LendingClub Corp vs. US70082LAB36 |
| Lexinfintech Holdings vs. Visa Class A | Lexinfintech Holdings vs. Mastercard | Lexinfintech Holdings vs. Oshidori International Holdings | Lexinfintech Holdings vs. US70082LAB36 |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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