Correlation Between Anywhere Real and Offerpad Solutions

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

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

Diversification Opportunities for Anywhere Real and Offerpad Solutions

-0.14

Correlation Coefficient

Anywhere Real  Offerpad Solutions

Good diversification

The 3 months correlation between Anywhere and Offerpad is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Anywhere Real Estate and Offerpad Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Offerpad Solutions and Anywhere Real 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 Anywhere Real Estate 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 Anywhere Real i.e., Anywhere Real and Offerpad Solutions go up and down completely randomly.

Pair Corralation between Anywhere Real and Offerpad Solutions

Given the investment horizon of 90 days Anywhere Real Estate is expected to generate 0.77 times more return on investment than Offerpad Solutions. However, Anywhere Real Estate is 1.29 times less risky than Offerpad Solutions. It trades about 0.0 of its potential returns per unit of risk. Offerpad Solutions is currently generating about -0.06 per unit of risk. If you would invest  442.00  in Anywhere Real Estate on January 6, 2025 and sell it today you would lose (116.00) from holding Anywhere Real Estate or give up 26.24% of portfolio value over 90 days.

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

Anywhere Real Estate  vs.  Offerpad Solutions

Anywhere Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anywhere Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Anywhere Real is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Offerpad Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Offerpad Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Anywhere Real and Offerpad Solutions

The main advantage of trading using opposite Anywhere Real and Offerpad Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anywhere Real 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 Anywhere Real Estate 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.