Correlation Between WeWork and EXp World

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Can any of the company-specific risk be diversified away by investing in both WeWork 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 WeWork and EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WeWork Inc and eXp World Holdings, you can compare the effects of market volatilities on WeWork 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 WeWork with a short position of EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of WeWork and EXp World.

Diversification Opportunities for WeWork and EXp World

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between WeWork and EXp is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding WeWork Inc 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 WeWork 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 WeWork Inc 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 WeWork i.e., WeWork and EXp World go up and down completely randomly.

Pair Corralation between WeWork and EXp World

If you would invest  1,326  in eXp World Holdings on September 2, 2024 and sell it today you would earn a total of  59.00  from holding eXp World Holdings or generate 4.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

WeWork Inc  vs.  eXp World Holdings

 Performance 
       Timeline  
WeWork Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
eXp World Holdings 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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.

WeWork and EXp World Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WeWork and EXp World

The main advantage of trading using opposite WeWork and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WeWork 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 WeWork Inc 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

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