Correlation Between Rafael Holdings and Opendoor Technologies

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

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

Diversification Opportunities for Rafael Holdings and Opendoor Technologies

-0.48

Correlation Coefficient

Rafael Holdings  Opendoor Technologies

Very good diversification

The 3 months correlation between Rafael and Opendoor is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Rafael Holdings Class and Opendoor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opendoor Technologies and Rafael 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 Rafael Holdings Class are associated (or correlated) with Opendoor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opendoor Technologies has no effect on the direction of Rafael Holdings i.e., Rafael Holdings and Opendoor Technologies go up and down completely randomly.

Pair Corralation between Rafael Holdings and Opendoor Technologies

Considering the 90-day investment horizon Rafael Holdings Class is expected to generate 0.9 times more return on investment than Opendoor Technologies. However, Rafael Holdings Class is 1.11 times less risky than Opendoor Technologies. It trades about 0.06 of its potential returns per unit of risk. Opendoor Technologies is currently generating about -0.21 per unit of risk. If you would invest  176.00  in Rafael Holdings Class on December 3, 2024 and sell it today you would earn a total of  19.00  from holding Rafael Holdings Class or generate 10.8% return on investment over 90 days.

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

Rafael Holdings Class  vs.  Opendoor Technologies

Rafael Holdings Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rafael Holdings Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rafael Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Opendoor Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Rafael Holdings and Opendoor Technologies

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

The idea behind Rafael Holdings Class and Opendoor Technologies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.