Correlation Between EXp World and American Well
Can any of the company-specific risk be diversified away by investing in both EXp World and American Well 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 EXp World and American Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eXp World Holdings and American Well Corp, you can compare the effects of market volatilities on EXp World and American Well 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 EXp World with a short position of American Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and American Well.
Diversification Opportunities for EXp World and American Well
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EXp and American is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and American Well Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Well Corp and EXp World 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 eXp World Holdings are associated (or correlated) with American Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Well Corp has no effect on the direction of EXp World i.e., EXp World and American Well go up and down completely randomly.
Pair Corralation between EXp World and American Well
Given the investment horizon of 90 days EXp World is expected to generate 1.53 times less return on investment than American Well. But when comparing it to its historical volatility, eXp World Holdings is 2.26 times less risky than American Well. It trades about 0.08 of its potential returns per unit of risk. American Well Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 780.00 in American Well Corp on September 2, 2024 and sell it today you would earn a total of 177.00 from holding American Well Corp or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eXp World Holdings vs. American Well Corp
Performance |
| Timeline |
| eXp World Holdings |
| American Well Corp |
EXp World and American Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and American Well
The main advantage of trading using opposite EXp World and American Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, American Well 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 American Well will offset losses from the drop in American Well's long position.| EXp World vs. Re Max Holding | EXp World vs. Frp Holdings Ord | EXp World vs. Maui Land Pineapple | EXp World vs. Redfin Corp |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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