Correlation Between Offerpad Solutions and Vantage Towers

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

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

Diversification Opportunities for Offerpad Solutions and Vantage Towers

0.3

Correlation Coefficient

Offerpad Solutions  Vantage Towers

Weak diversification

The 3 months correlation between Offerpad and Vantage is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Offerpad Solutions and Vantage Towers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Towers AG and Offerpad Solutions 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 Offerpad Solutions are associated (or correlated) with Vantage Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Towers AG has no effect on the direction of Offerpad Solutions i.e., Offerpad Solutions and Vantage Towers go up and down completely randomly.

Pair Corralation between Offerpad Solutions and Vantage Towers

Given the investment horizon of 90 days Offerpad Solutions is expected to generate 7.77 times more return on investment than Vantage Towers. However, Offerpad Solutions is 7.77 times more volatile than Vantage Towers AG. It trades about 0.34 of its potential returns per unit of risk. Vantage Towers AG is currently generating about 0.21 per unit of risk. If you would invest  327.00  in Offerpad Solutions on September 5, 2024 and sell it today you would earn a total of  177.00  from holding Offerpad Solutions or generate 54.13% return on investment over 90 days.

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

Offerpad Solutions  vs.  Vantage Towers AG

Offerpad Solutions

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Offerpad Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Offerpad Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Vantage Towers AG

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vantage Towers AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vantage Towers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Offerpad Solutions and Vantage Towers

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

The idea behind Offerpad Solutions and Vantage Towers AG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.