Correlation Between Newmark and EXp World
Can any of the company-specific risk be diversified away by investing in both Newmark and EXp World 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 Newmark and EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and eXp World Holdings, you can compare the effects of market volatilities on Newmark and EXp World 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 Newmark with a short position of EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and EXp World.
Diversification Opportunities for Newmark and EXp World
Poor diversification
The 3 months correlation between Newmark and EXp is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and eXp World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eXp World Holdings and Newmark 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 Newmark Group are associated (or correlated) with EXp World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eXp World Holdings has no effect on the direction of Newmark i.e., Newmark and EXp World go up and down completely randomly.
Pair Corralation between Newmark and EXp World
Given the investment horizon of 90 days Newmark Group is expected to generate 0.64 times more return on investment than EXp World. However, Newmark Group is 1.57 times less risky than EXp World. It trades about 0.18 of its potential returns per unit of risk. eXp World Holdings is currently generating about 0.08 per unit of risk. If you would invest 1,006 in Newmark Group on September 1, 2024 and sell it today you would earn a total of 542.00 from holding Newmark Group or generate 53.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. eXp World Holdings
Performance |
| Timeline |
| Newmark Group |
| eXp World Holdings |
Newmark and EXp World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and EXp World
The main advantage of trading using opposite Newmark and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, EXp World 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 EXp World will offset losses from the drop in EXp World's long position.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| EXp World vs. Re Max Holding | EXp World vs. Fathom Holdings | EXp World vs. Anywhere Real Estate | EXp World vs. RMR Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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