Correlation Between Virtus Investment and LendingClub Corp

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

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

Diversification Opportunities for Virtus Investment and LendingClub Corp

0.54

Correlation Coefficient

Virtus Investment  LendingClub Corp

Very weak diversification

The 3 months correlation between Virtus and LendingClub is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners, and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and Virtus Investment 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 Virtus Investment Partners, 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 Virtus Investment i.e., Virtus Investment and LendingClub Corp go up and down completely randomly.

Pair Corralation between Virtus Investment and LendingClub Corp

Given the investment horizon of 90 days Virtus Investment Partners, is expected to under-perform the LendingClub Corp. But the stock apears to be less risky and, when comparing its historical volatility, Virtus Investment Partners, is 2.44 times less risky than LendingClub Corp. The stock trades about -0.23 of its potential returns per unit of risk. The LendingClub Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,507  in LendingClub Corp on November 19, 2024 and sell it today you would lose (98.00) from holding LendingClub Corp or give up 6.5% of portfolio value over 90 days.

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

Virtus Investment Partners,  vs.  LendingClub Corp

Virtus Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Investment Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LendingClub Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Virtus Investment and LendingClub Corp

The main advantage of trading using opposite Virtus Investment and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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 Virtus Investment Partners, 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.