Correlation Between EXp World and Real Brokerage

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

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

Diversification Opportunities for EXp World and Real Brokerage

-0.11

Correlation Coefficient

EXp World  Real Brokerage

Good diversification

The 3 months correlation between EXp and Real is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Real Brokerage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Brokerage and EXp World 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 eXp World Holdings are associated (or correlated) with Real Brokerage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Brokerage has no effect on the direction of EXp World i.e., EXp World and Real Brokerage go up and down completely randomly.

Pair Corralation between EXp World and Real Brokerage

Given the investment horizon of 90 days EXp World is expected to generate 2.95 times less return on investment than Real Brokerage. But when comparing it to its historical volatility, eXp World Holdings is 1.14 times less risky than Real Brokerage. It trades about 0.04 of its potential returns per unit of risk. Real Brokerage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Real Brokerage on August 16, 2024 and sell it today you would earn a total of  411.00  from holding Real Brokerage or generate 357.39% return on investment over 90 days.

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

eXp World Holdings  vs.  Real Brokerage

eXp World Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in eXp World Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, EXp World demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Real Brokerage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Brokerage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with EXp World and Real Brokerage

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

The idea behind eXp World Holdings and Real Brokerage 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.