Correlation Between Fathom Holdings and EXp World

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

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

Diversification Opportunities for Fathom Holdings and EXp World

-0.07

Correlation Coefficient

Fathom Holdings  EXp World

Good diversification

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

Pair Corralation between Fathom Holdings and EXp World

Given the investment horizon of 90 days Fathom Holdings is expected to under-perform the EXp World. In addition to that, Fathom Holdings is 1.46 times more volatile than eXp World Holdings. It trades about -0.04 of its total potential returns per unit of risk. eXp World Holdings is currently generating about -0.01 per unit of volatility. If you would invest  1,932  in eXp World Holdings on September 12, 2024 and sell it today you would lose (623.00) from holding eXp World Holdings or give up 32.25% of portfolio value over 90 days.

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

Fathom Holdings  vs.  eXp World Holdings

Fathom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

eXp World Holdings

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eXp World Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, EXp World is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fathom Holdings and EXp World

The main advantage of trading using opposite Fathom Holdings and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fathom Holdings 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 Fathom Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.