Correlation Between LendingClub Corp and Nio
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and Nio 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 Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and Nio Class A, you can compare the effects of market volatilities on LendingClub Corp and Nio 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 Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and Nio.
Diversification Opportunities for LendingClub Corp and Nio
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LendingClub and Nio is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A 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 Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Nio go up and down completely randomly.
Pair Corralation between LendingClub Corp and Nio
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 3.78 times less return on investment than Nio. In addition to that, LendingClub Corp is 1.01 times more volatile than Nio Class A. It trades about 0.08 of its total potential returns per unit of risk. Nio Class A is currently generating about 0.32 per unit of volatility. If you would invest 437.00 in Nio Class A on February 6, 2024 and sell it today you would earn a total of 156.50 from holding Nio Class A or generate 35.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingClub Corp vs. Nio Class A
Performance |
| Timeline |
| LendingClub Corp |
| Nio Class A |
LendingClub Corp and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingClub Corp and Nio
The main advantage of trading using opposite LendingClub Corp and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, Nio 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 Nio will offset losses from the drop in Nio'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 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |