Correlation Between Embrace Change and LendingClub Corp

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

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

Diversification Opportunities for Embrace Change and LendingClub Corp

-0.82

Correlation Coefficient

Embrace Change  LendingClub Corp

Pay attention - limited upside

The 3 months correlation between Embrace and LendingClub is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and LendingClub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingClub Corp and Embrace Change 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 Embrace Change Acquisition 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 Embrace Change i.e., Embrace Change and LendingClub Corp go up and down completely randomly.

Pair Corralation between Embrace Change and LendingClub Corp

Given the investment horizon of 90 days Embrace Change Acquisition is expected to generate 0.09 times more return on investment than LendingClub Corp. However, Embrace Change Acquisition is 11.2 times less risky than LendingClub Corp. It trades about 0.09 of its potential returns per unit of risk. LendingClub Corp is currently generating about -0.17 per unit of risk. If you would invest  1,168  in Embrace Change Acquisition on January 10, 2025 and sell it today you would earn a total of  23.00  from holding Embrace Change Acquisition or generate 1.97% return on investment over 90 days.

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

Embrace Change Acquisition  vs.  LendingClub Corp

Embrace Change Acqui

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Embrace Change Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Embrace Change is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Embrace Change and LendingClub Corp

The main advantage of trading using opposite Embrace Change and LendingClub Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change 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 Embrace Change Acquisition 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.