Correlation Between Opendoor Technologies and Offerpad Solutions
Can any of the company-specific risk be diversified away by investing in both Opendoor Technologies 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 Opendoor Technologies and Offerpad Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opendoor Technologies and Offerpad Solutions, you can compare the effects of market volatilities on Opendoor Technologies 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 Opendoor Technologies with a short position of Offerpad Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opendoor Technologies and Offerpad Solutions.
Diversification Opportunities for Opendoor Technologies and Offerpad Solutions
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Opendoor and Offerpad is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Opendoor Technologies and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions and Opendoor Technologies 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 Opendoor Technologies 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 Opendoor Technologies i.e., Opendoor Technologies and Offerpad Solutions go up and down completely randomly.
Pair Corralation between Opendoor Technologies and Offerpad Solutions
Given the investment horizon of 90 days Opendoor Technologies is expected to generate 0.78 times more return on investment than Offerpad Solutions. However, Opendoor Technologies is 1.28 times less risky than Offerpad Solutions. It trades about -0.04 of its potential returns per unit of risk. Offerpad Solutions is currently generating about -0.04 per unit of risk. If you would invest 194.00 in Opendoor Technologies on November 2, 2024 and sell it today you would lose (51.00) from holding Opendoor Technologies or give up 26.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opendoor Technologies vs. Offerpad Solutions
Performance |
| Timeline |
| Opendoor Technologies |
| Offerpad Solutions |
Opendoor Technologies and Offerpad Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opendoor Technologies and Offerpad Solutions
The main advantage of trading using opposite Opendoor Technologies and Offerpad Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opendoor Technologies 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.| Opendoor Technologies vs. eXp World Holdings | Opendoor Technologies vs. Offerpad Solutions | Opendoor Technologies vs. Re Max Holding | Opendoor Technologies vs. Anywhere Real Estate |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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