Correlation Between LendingClub Corp and Chicago Atlantic

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

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

Diversification Opportunities for LendingClub Corp and Chicago Atlantic

0.64

Correlation Coefficient

LendingClub Corp  Chicago Atlantic

Poor diversification

The 3 months correlation between LendingClub and Chicago is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LendingClub Corp and Chicago Atlantic Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic Real 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 Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic Real has no effect on the direction of LendingClub Corp i.e., LendingClub Corp and Chicago Atlantic go up and down completely randomly.

Pair Corralation between LendingClub Corp and Chicago Atlantic

Allowing for the 90-day total investment horizon LendingClub Corp is expected to generate 4.28 times more return on investment than Chicago Atlantic. However, LendingClub Corp is 4.28 times more volatile than Chicago Atlantic Real. It trades about 0.19 of its potential returns per unit of risk. Chicago Atlantic Real is currently generating about 0.11 per unit of risk. If you would invest  1,175  in LendingClub Corp on September 3, 2024 and sell it today you would earn a total of  489.00  from holding LendingClub Corp or generate 41.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

LendingClub Corp  vs.  Chicago Atlantic Real

LendingClub Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LendingClub Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, LendingClub Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chicago Atlantic Real

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic Real are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with LendingClub Corp and Chicago Atlantic

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

The idea behind LendingClub Corp and Chicago Atlantic Real 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.