Correlation Between Adler Group and EXp World

Can any of the company-specific risk be diversified away by investing in both Adler Group 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 Adler Group and EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adler Group SA and eXp World Holdings, you can compare the effects of market volatilities on Adler Group 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 Adler Group with a short position of EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and EXp World.

Diversification Opportunities for Adler Group and EXp World

0.07

Correlation Coefficient

Adler Group  EXp World

Significant diversification

The 3 months correlation between Adler and EXp is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Adler Group SA 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 Adler Group 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 Adler Group SA 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 Adler Group i.e., Adler Group and EXp World go up and down completely randomly.

Pair Corralation between Adler Group and EXp World

Assuming the 90 days horizon Adler Group SA is expected to under-perform the EXp World. In addition to that, Adler Group is 1.05 times more volatile than eXp World Holdings. It trades about -0.02 of its total potential returns per unit of risk. eXp World Holdings is currently generating about -0.02 per unit of volatility. If you would invest  1,513  in eXp World Holdings on September 21, 2024 and sell it today you would lose (350.00) from holding eXp World Holdings or give up 23.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Adler Group SA  vs.  eXp World Holdings

Adler Group SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adler Group SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adler Group reported solid returns over the last few months and may actually be approaching a breakup point.

eXp World Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eXp World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Adler Group and EXp World

The main advantage of trading using opposite Adler Group and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adler Group 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.

The idea behind Adler Group SA and eXp World Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.