Correlation Between Anywhere Real and Doma Holdings

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

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

Diversification Opportunities for Anywhere Real and Doma Holdings

-0.34

Correlation Coefficient

Anywhere Real  Doma Holdings

Very good diversification

The 3 months correlation between Anywhere and Doma is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Anywhere Real Estate and Doma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doma Holdings and Anywhere Real 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 Anywhere Real Estate are associated (or correlated) with Doma Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doma Holdings has no effect on the direction of Anywhere Real i.e., Anywhere Real and Doma Holdings go up and down completely randomly.

Pair Corralation between Anywhere Real and Doma Holdings

If you would invest  378.00  in Anywhere Real Estate on September 2, 2024 and sell it today you would earn a total of  112.00  from holding Anywhere Real Estate or generate 29.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Anywhere Real Estate  vs.  Doma Holdings

Anywhere Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anywhere Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Anywhere Real is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Doma Holdings

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Doma Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat uncertain primary indicators, Doma Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Anywhere Real and Doma Holdings

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

The idea behind Anywhere Real Estate and Doma 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.