Correlation Between Newmark and Offerpad Solutions
Can any of the company-specific risk be diversified away by investing in both Newmark 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 Newmark and Offerpad Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and Offerpad Solutions, you can compare the effects of market volatilities on Newmark 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 Newmark with a short position of Offerpad Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and Offerpad Solutions.
Diversification Opportunities for Newmark and Offerpad Solutions
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newmark and Offerpad is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions 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 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 Newmark i.e., Newmark and Offerpad Solutions go up and down completely randomly.
Pair Corralation between Newmark and Offerpad Solutions
Given the investment horizon of 90 days Newmark Group is expected to generate 0.36 times more return on investment than Offerpad Solutions. However, Newmark Group is 2.74 times less risky than Offerpad Solutions. It trades about 0.18 of its potential returns per unit of risk. Offerpad Solutions is currently generating about 0.03 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. Offerpad Solutions
Performance |
| Timeline |
| Newmark Group |
| Offerpad Solutions |
Newmark and Offerpad Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and Offerpad Solutions
The main advantage of trading using opposite Newmark and Offerpad Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark 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.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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