Correlation Between LendingClub Corp and Marui Group

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

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

Diversification Opportunities for LendingClub Corp and Marui Group

-0.21

Correlation Coefficient

LendingClub Corp  Marui Group

Very good diversification

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

Pair Corralation between LendingClub Corp and Marui Group

Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 0.55 times more return on investment than Marui Group. However, LendingClub Corp is 1.82 times less risky than Marui Group. It trades about 0.07 of its potential returns per unit of risk. Marui Group Co is currently generating about 0.01 per unit of risk. If you would invest  1,327  in LendingClub Corp on October 15, 2024 and sell it today you would earn a total of  167.00  from holding LendingClub Corp or generate 12.58% 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.  Marui Group Co

LendingClub Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LendingClub Corp are ranked lower than 5 (%) 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.

Marui Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marui Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Marui Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LendingClub Corp and Marui Group

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

The idea behind LendingClub Corp and Marui Group Co 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.