Correlation Between LendingClub Corp and PIMCO 1
Can any of the company-specific risk be diversified away by investing in both LendingClub Corp and PIMCO 1 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 PIMCO 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingClub Corp and PIMCO 1 5 Year, you can compare the effects of market volatilities on LendingClub Corp and PIMCO 1 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 PIMCO 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingClub Corp and PIMCO 1.
Diversification Opportunities for LendingClub Corp and PIMCO 1
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LendingClub and PIMCO is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and PIMCO 1-5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 1-5 Year 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 PIMCO 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO 1-5 Year has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and PIMCO 1 go up and down completely randomly.
Pair Corralation between LendingClub Corp and PIMCO 1
Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 18.87 times more return on investment than PIMCO 1. However, LendingClub Corp is 18.87 times more volatile than PIMCO 1 5 Year. It trades about 0.1 of its potential returns per unit of risk. PIMCO 1 5 Year is currently generating about 0.34 per unit of risk. If you would invest 830.00 in LendingClub Corp on December 29, 2023 and sell it today you would earn a total of 38.00 from holding LendingClub Corp or generate 4.58% 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. PIMCO 1-5 Year
Performance |
Timeline |
LendingClub Corp |
PIMCO 1-5 Year |
LendingClub Corp and PIMCO 1 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LendingClub Corp and PIMCO 1
The main advantage of trading using opposite LendingClub Corp and PIMCO 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingClub Corp position performs unexpectedly, PIMCO 1 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 PIMCO 1 will offset losses from the drop in PIMCO 1's long position.LendingClub Corp vs. Visa Class A | LendingClub Corp vs. Diamond Hill Investment | LendingClub Corp vs. Nocturne Acquisition Corp | LendingClub Corp vs. Mountain I Acquisition |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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