Correlation Between Appreciate Holdings and Redfin Corp

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

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

Diversification Opportunities for Appreciate Holdings and Redfin Corp

0.0

Correlation Coefficient

Appreciate Holdings  Redfin Corp

Pay attention - limited upside

The 3 months correlation between Appreciate and Redfin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Appreciate Holdings and Redfin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redfin Corp and Appreciate 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 Appreciate Holdings are associated (or correlated) with Redfin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redfin Corp has no effect on the direction of Appreciate Holdings i.e., Appreciate Holdings and Redfin Corp go up and down completely randomly.

Pair Corralation between Appreciate Holdings and Redfin Corp

If you would invest  643.00  in Redfin Corp on October 7, 2024 and sell it today you would earn a total of  150.00  from holding Redfin Corp or generate 23.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Appreciate Holdings  vs.  Redfin Corp

Appreciate Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Appreciate Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Appreciate Holdings is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Redfin Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Appreciate Holdings and Redfin Corp

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

The idea behind Appreciate Holdings and Redfin Corp 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.

Check out your portfolio center.

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 Correlations module to find global opportunities by holding instruments from different markets.