Correlation Between EXp World and Offerpad Solutions
Can any of the company-specific risk be diversified away by investing in both EXp World and Offerpad Solutions 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 Offerpad Solutions 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 Offerpad Solutions, you can compare the effects of market volatilities on EXp World and Offerpad Solutions 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 Offerpad Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Offerpad Solutions.
Diversification Opportunities for EXp World and Offerpad Solutions
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EXp and Offerpad is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions 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 Offerpad Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offerpad Solutions has no effect on the direction of EXp World i.e., EXp World and Offerpad Solutions go up and down completely randomly.
Pair Corralation between EXp World and Offerpad Solutions
Given the investment horizon of 90 days EXp World is expected to generate 4.51 times less return on investment than Offerpad Solutions. But when comparing it to its historical volatility, eXp World Holdings is 1.74 times less risky than Offerpad Solutions. It trades about 0.15 of its potential returns per unit of risk. Offerpad Solutions is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Offerpad Solutions on August 31, 2024 and sell it today you would earn a total of 177.00 from holding Offerpad Solutions or generate 59.0% 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. Offerpad Solutions
Performance |
| Timeline |
| eXp World Holdings |
| Offerpad Solutions |
EXp World and Offerpad Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and Offerpad Solutions
The main advantage of trading using opposite EXp World and Offerpad Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, Offerpad Solutions 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 Offerpad Solutions will offset losses from the drop in Offerpad Solutions' long position.| EXp World vs. Re Max Holding | EXp World vs. Fathom Holdings | EXp World vs. Anywhere Real Estate | EXp World vs. RMR Group |
| Offerpad Solutions vs. Re Max Holding | Offerpad Solutions vs. Marcus Millichap | Offerpad Solutions vs. Frp Holdings Ord | Offerpad Solutions vs. Maui Land Pineapple |
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 CEOs Directory module to screen CEOs from public companies around the world.
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