Correlation Between Nocturne Acquisition and LendingClub Corp

Can any of the company-specific risk be diversified away by investing in both Nocturne Acquisition and LendingClub Corp 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 Nocturne Acquisition and LendingClub Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nocturne Acquisition Corp and LendingClub Corp, you can compare the effects of market volatilities on Nocturne Acquisition and LendingClub Corp 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 Nocturne Acquisition with a short position of LendingClub Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nocturne Acquisition and LendingClub Corp.

Diversification Opportunities for Nocturne Acquisition and LendingClub Corp

0.21

Correlation Coefficient

Nocturne Acquisition  LendingClub Corp

Modest diversification

The 3 months correlation between Nocturne and LendingClub is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nocturne Acquisition Corp and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and Nocturne Acquisition 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 Nocturne Acquisition Corp are associated (or correlated) with LendingClub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingClub Corp has no effect on the direction of Nocturne Acquisition i.e., Nocturne Acquisition and LendingClub Corp go up and down completely randomly.

Pair Corralation between Nocturne Acquisition and LendingClub Corp

If you would invest  768.00  in LendingClub Corp on February 16, 2024 and sell it today you would earn a total of  179.00  from holding LendingClub Corp or generate 23.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Nocturne Acquisition Corp  vs.  LendingClub Corp

Nocturne Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nocturne Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nocturne Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LendingClub Corp

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LendingClub Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, LendingClub Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Nocturne Acquisition and LendingClub Corp

The main advantage of trading using opposite Nocturne Acquisition and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nocturne Acquisition position performs unexpectedly, LendingClub Corp 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 LendingClub Corp will offset losses from the drop in LendingClub Corp's long position.

The idea behind Nocturne Acquisition Corp and LendingClub Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.