Correlation Between Moneygram Int and LendingClub Corp

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

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

Diversification Opportunities for Moneygram Int and LendingClub Corp

0.18

Correlation Coefficient

Moneygram Int  LendingClub Corp

Average diversification

The 3 months correlation between Moneygram and LendingClub is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Moneygram Int and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and Moneygram Int 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 Moneygram Int 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 Moneygram Int i.e., Moneygram Int and LendingClub Corp go up and down completely randomly.

Pair Corralation between Moneygram Int and LendingClub Corp

Considering the 90-day investment horizon Moneygram Int is expected to generate 9.93 times less return on investment than LendingClub Corp. But when comparing it to its historical volatility, Moneygram Int is 2.01 times less risky than LendingClub Corp. It trades about 0.01 of its potential returns per unit of risk. LendingClub Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  846.00  in LendingClub Corp on September 23, 2024 and sell it today you would earn a total of  800.00  from holding LendingClub Corp or generate 94.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	21.93%
Values	Daily Returns

Moneygram Int  vs.  LendingClub Corp

Moneygram Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moneygram Int has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Moneygram Int is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 abnormal fundamental indicators, LendingClub Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moneygram Int and LendingClub Corp

The main advantage of trading using opposite Moneygram Int and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moneygram Int 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 Moneygram Int 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.