Correlation Between EXp World and Capital Properties

Can any of the company-specific risk be diversified away by investing in both EXp World and Capital Properties 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 Capital Properties 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 Capital Properties, you can compare the effects of market volatilities on EXp World and Capital Properties 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 Capital Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Capital Properties.

Diversification Opportunities for EXp World and Capital Properties

-0.37

Correlation Coefficient

EXp World  Capital Properties

Very good diversification

The 3 months correlation between EXp and Capital is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Capital Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Properties 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 Capital Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Properties has no effect on the direction of EXp World i.e., EXp World and Capital Properties go up and down completely randomly.

Pair Corralation between EXp World and Capital Properties

If you would invest  1,267  in Capital Properties on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Capital Properties or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

eXp World Holdings  vs.  Capital Properties

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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Capital Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Capital Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with EXp World and Capital Properties

The main advantage of trading using opposite EXp World and Capital Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, Capital Properties 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 Capital Properties will offset losses from the drop in Capital Properties' long position.

The idea behind eXp World Holdings and Capital Properties 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 Transaction History module to view history of all your transactions and understand their impact on performance.