Correlation Between Opendoor Technologies and WeWork

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

By analyzing existing cross correlation between Opendoor Technologies and WeWork Inc, you can compare the effects of market volatilities on Opendoor Technologies and WeWork 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 WeWork. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opendoor Technologies and WeWork.

Diversification Opportunities for Opendoor Technologies and WeWork

0.56

Correlation Coefficient

Opendoor Technologies  WeWork

Very weak diversification

The 3 months correlation between Opendoor and WeWork is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Opendoor Technologies and WeWork Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WeWork Inc 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 WeWork. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WeWork Inc has no effect on the direction of Opendoor Technologies i.e., Opendoor Technologies and WeWork go up and down completely randomly.

Pair Corralation between Opendoor Technologies and WeWork

If you would invest  194.00  in Opendoor Technologies on September 3, 2024 and sell it today you would earn a total of  19.00  from holding Opendoor Technologies or generate 9.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Opendoor Technologies  vs.  WeWork Inc

Opendoor Technologies

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Opendoor Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Opendoor Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

WeWork Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WeWork Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, WeWork is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Opendoor Technologies and WeWork

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

The idea behind Opendoor Technologies and WeWork Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.