Correlation Between LendingClub Corp and Jackson Financial

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

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

Diversification Opportunities for LendingClub Corp and Jackson Financial

-0.27

Correlation Coefficient

LendingClub Corp  Jackson Financial

Very good diversification

The 3 months correlation between LendingClub and Jackson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial 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 Jackson Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Financial has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Jackson Financial go up and down completely randomly.

Pair Corralation between LendingClub Corp and Jackson Financial

Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 2.06 times more return on investment than Jackson Financial. However, LendingClub Corp is 2.06 times more volatile than Jackson Financial. It trades about 0.06 of its potential returns per unit of risk. Jackson Financial is currently generating about -0.03 per unit of risk. If you would invest  1,540  in LendingClub Corp on October 11, 2024 and sell it today you would earn a total of  52.00  from holding LendingClub Corp or generate 3.38% 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.  Jackson Financial

LendingClub Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LendingClub Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, LendingClub Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jackson Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jackson Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with LendingClub Corp and Jackson Financial

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

The idea behind LendingClub Corp and Jackson Financial 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.