Correlation Between EXp World and Re Max
Can any of the company-specific risk be diversified away by investing in both EXp World and Re Max 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 Re Max 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 Re Max Holding, you can compare the effects of market volatilities on EXp World and Re Max 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 Re Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Re Max.
Diversification Opportunities for EXp World and Re Max
Very poor diversification
The 3 months correlation between EXp and RMAX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding 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 Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of EXp World i.e., EXp World and Re Max go up and down completely randomly.
Pair Corralation between EXp World and Re Max
Given the investment horizon of 90 days eXp World Holdings is expected to generate 1.41 times more return on investment than Re Max. However, EXp World is 1.41 times more volatile than Re Max Holding. It trades about -0.03 of its potential returns per unit of risk. Re Max Holding is currently generating about -0.11 per unit of risk. If you would invest 1,160 in eXp World Holdings on October 20, 2024 and sell it today you would lose (37.00) from holding eXp World Holdings or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
eXp World Holdings vs. Re Max Holding
Performance |
| Timeline |
| eXp World Holdings |
| Re Max Holding |
EXp World and Re Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and Re Max
The main advantage of trading using opposite EXp World and Re Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, Re Max 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 Re Max will offset losses from the drop in Re Max'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 |
| Re Max vs. Marcus Millichap | Re Max vs. Frp Holdings Ord | Re Max vs. Maui Land Pineapple | Re Max vs. Transcontinental Realty Investors |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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