Correlation Between Essential Properties and Offerpad Solutions

Can any of the company-specific risk be diversified away by investing in both Essential Properties and Offerpad Solutions 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 Essential Properties and Offerpad Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Essential Properties Realty and Offerpad Solutions, you can compare the effects of market volatilities on Essential Properties and Offerpad Solutions 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 Essential Properties with a short position of Offerpad Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essential Properties and Offerpad Solutions.

Diversification Opportunities for Essential Properties and Offerpad Solutions

-0.32

Correlation Coefficient

Essential Properties  Offerpad Solutions

Very good diversification

The 3 months correlation between Essential and Offerpad is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Essential Properties Realty and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions and Essential Properties 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 Essential Properties Realty are associated (or correlated) with Offerpad Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Offerpad Solutions has no effect on the direction of Essential Properties i.e., Essential Properties and Offerpad Solutions go up and down completely randomly.

Pair Corralation between Essential Properties and Offerpad Solutions

Given the investment horizon of 90 days Essential Properties Realty is expected to under-perform the Offerpad Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Essential Properties Realty is 21.97 times less risky than Offerpad Solutions. The stock trades about -0.1 of its potential returns per unit of risk. The Offerpad Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  142.00  in Offerpad Solutions on July 11, 2025 and sell it today you would earn a total of  184.00  from holding Offerpad Solutions or generate 129.58% return on investment over 90 days.

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

Essential Properties Realty  vs.  Offerpad Solutions

Essential Properties

Risk-Adjusted Performance

Weakest

Over the last 90 days Essential Properties Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Offerpad Solutions

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Offerpad Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Offerpad Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Essential Properties and Offerpad Solutions

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

The idea behind Essential Properties Realty and Offerpad Solutions 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.