Correlation Between Real Brokerage and EXp World

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

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

Diversification Opportunities for Real Brokerage and EXp World

0.11

Correlation Coefficient

Real Brokerage  EXp World

Average diversification

The 3 months correlation between Real and EXp is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Real Brokerage 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 Real Brokerage 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 Real Brokerage 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 Real Brokerage i.e., Real Brokerage and EXp World go up and down completely randomly.

Pair Corralation between Real Brokerage and EXp World

Given the investment horizon of 90 days Real Brokerage is expected to under-perform the EXp World. In addition to that, Real Brokerage is 1.15 times more volatile than eXp World Holdings. It trades about -0.05 of its total potential returns per unit of risk. eXp World Holdings is currently generating about 0.11 per unit of volatility. If you would invest  1,172  in eXp World Holdings on August 30, 2024 and sell it today you would earn a total of  236.00  from holding eXp World Holdings or generate 20.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Real Brokerage  vs.  eXp World Holdings

Real Brokerage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Brokerage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

eXp World Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eXp World Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, EXp World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Real Brokerage and EXp World

The main advantage of trading using opposite Real Brokerage and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Brokerage 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 Real Brokerage 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.