Correlation Between SBA Communications and EXp World
Can any of the company-specific risk be diversified away by investing in both SBA Communications 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 SBA Communications and EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and eXp World Holdings, you can compare the effects of market volatilities on SBA Communications 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 SBA Communications with a short position of EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and EXp World.
Diversification Opportunities for SBA Communications and EXp World
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBA and EXp is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp 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 SBA Communications 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 SBA Communications Corp 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 SBA Communications i.e., SBA Communications and EXp World go up and down completely randomly.
Pair Corralation between SBA Communications and EXp World
Given the investment horizon of 90 days SBA Communications Corp is expected to under-perform the EXp World. But the stock apears to be less risky and, when comparing its historical volatility, SBA Communications Corp is 1.76 times less risky than EXp World. The stock trades about -0.22 of its potential returns per unit of risk. The eXp World Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 925.00 in eXp World Holdings on January 19, 2024 and sell it today you would earn a total of 50.00 from holding eXp World Holdings or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBA Communications Corp vs. eXp World Holdings
Performance |
| Timeline |
| SBA Communications Corp |
| eXp World Holdings |
SBA Communications and EXp World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and EXp World
The main advantage of trading using opposite SBA Communications and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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.| SBA Communications vs. American Tower Corp | SBA Communications vs. Digital Realty Trust | SBA Communications vs. Equinix | SBA Communications vs. Iron Mountain Incorporated |
| EXp World vs. Re Max Holding | EXp World vs. Fathom HoldingsInc | EXp World vs. Anywhere Real Estate | EXp World vs. RMR Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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