Correlation Between EXp World and Fathom Holdings

Can any of the company-specific risk be diversified away by investing in both EXp World and Fathom Holdings 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 Fathom Holdings 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 Fathom Holdings, you can compare the effects of market volatilities on EXp World and Fathom Holdings 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 Fathom Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Fathom Holdings.

Diversification Opportunities for EXp World and Fathom Holdings

-0.07

Correlation Coefficient

EXp World  Fathom Holdings

Good diversification

The 3 months correlation between EXp and Fathom is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Fathom Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Holdings 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 Fathom Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Holdings has no effect on the direction of EXp World i.e., EXp World and Fathom Holdings go up and down completely randomly.

Pair Corralation between EXp World and Fathom Holdings

Given the investment horizon of 90 days eXp World Holdings is expected to generate 0.59 times more return on investment than Fathom Holdings. However, eXp World Holdings is 1.68 times less risky than Fathom Holdings. It trades about 0.01 of its potential returns per unit of risk. Fathom Holdings is currently generating about -0.1 per unit of risk. If you would invest  1,306  in eXp World Holdings on September 12, 2024 and sell it today you would earn a total of  3.00  from holding eXp World Holdings or generate 0.23% 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.  Fathom Holdings

eXp World Holdings

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eXp World Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, EXp World is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Fathom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with EXp World and Fathom Holdings

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

The idea behind eXp World Holdings and Fathom 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.