Correlation Between EXp World and Marcus Millichap
Can any of the company-specific risk be diversified away by investing in both EXp World and Marcus Millichap 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 Marcus Millichap 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 Marcus Millichap, you can compare the effects of market volatilities on EXp World and Marcus Millichap 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 Marcus Millichap. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Marcus Millichap.
Diversification Opportunities for EXp World and Marcus Millichap
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EXp and Marcus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap 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 Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of EXp World i.e., EXp World and Marcus Millichap go up and down completely randomly.
Pair Corralation between EXp World and Marcus Millichap
Given the investment horizon of 90 days eXp World Holdings is expected to generate 1.95 times more return on investment than Marcus Millichap. However, EXp World is 1.95 times more volatile than Marcus Millichap. It trades about 0.16 of its potential returns per unit of risk. Marcus Millichap is currently generating about 0.28 per unit of risk. If you would invest 1,292 in eXp World Holdings on August 27, 2024 and sell it today you would earn a total of 147.00 from holding eXp World Holdings or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eXp World Holdings vs. Marcus Millichap
Performance |
| Timeline |
| eXp World Holdings |
| Marcus Millichap |
EXp World and Marcus Millichap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and Marcus Millichap
The main advantage of trading using opposite EXp World and Marcus Millichap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, Marcus Millichap 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 Marcus Millichap will offset losses from the drop in Marcus Millichap's long position.| EXp World vs. Re Max Holding | EXp World vs. Fathom Holdings | EXp World vs. Anywhere Real Estate | EXp World vs. RMR Group |
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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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