Correlation Between Bigcommerce Holdings and EXp World

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

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

Diversification Opportunities for Bigcommerce Holdings and EXp World

0.22

Correlation Coefficient

Bigcommerce Holdings  EXp World

Modest diversification

The 3 months correlation between Bigcommerce and EXp is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bigcommerce Holdings 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 Bigcommerce 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 Bigcommerce Holdings 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 Bigcommerce Holdings i.e., Bigcommerce Holdings and EXp World go up and down completely randomly.

Pair Corralation between Bigcommerce Holdings and EXp World

Given the investment horizon of 90 days Bigcommerce Holdings is expected to generate 1.31 times more return on investment than EXp World. However, Bigcommerce Holdings is 1.31 times more volatile than eXp World Holdings. It trades about 0.15 of its potential returns per unit of risk. eXp World Holdings is currently generating about -0.05 per unit of risk. If you would invest  582.00  in Bigcommerce Holdings on September 13, 2024 and sell it today you would earn a total of  188.00  from holding Bigcommerce Holdings or generate 32.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bigcommerce Holdings  vs.  eXp World Holdings

Bigcommerce Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bigcommerce Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Bigcommerce Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

eXp World Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eXp World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Bigcommerce Holdings and EXp World

The main advantage of trading using opposite Bigcommerce Holdings and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bigcommerce Holdings 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 Bigcommerce Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.