Correlation Between Re Max and EXp World

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

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

Diversification Opportunities for Re Max and EXp World

0.89

Correlation Coefficient

Re Max  EXp World

Very poor diversification

The 3 months correlation between RMAX and EXp is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Re Max Holding 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 Re Max 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 Re Max Holding 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 Re Max i.e., Re Max and EXp World go up and down completely randomly.

Pair Corralation between Re Max and EXp World

Given the investment horizon of 90 days Re Max Holding is expected to under-perform the EXp World. In addition to that, Re Max is 1.1 times more volatile than eXp World Holdings. It trades about -0.1 of its total potential returns per unit of risk. eXp World Holdings is currently generating about -0.08 per unit of volatility. If you would invest  1,174  in eXp World Holdings on December 27, 2024 and sell it today you would lose (147.00) from holding eXp World Holdings or give up 12.52% of portfolio value over 90 days.

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

Re Max Holding  vs.  eXp World Holdings

Re Max Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Re Max Holding 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

eXp World Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days eXp World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Re Max and EXp World

The main advantage of trading using opposite Re Max and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Re Max 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 Re Max Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..