Correlation Between EXp World and Forestar
Can any of the company-specific risk be diversified away by investing in both EXp World and Forestar 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 Forestar 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 Forestar Group, you can compare the effects of market volatilities on EXp World and Forestar 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 Forestar. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and Forestar.
Diversification Opportunities for EXp World and Forestar
Very poor diversification
The 3 months correlation between EXp and Forestar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and Forestar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forestar Group 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 Forestar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forestar Group has no effect on the direction of EXp World i.e., EXp World and Forestar go up and down completely randomly.
Pair Corralation between EXp World and Forestar
Given the investment horizon of 90 days EXp World is expected to generate 1.42 times less return on investment than Forestar. In addition to that, EXp World is 1.38 times more volatile than Forestar Group. It trades about 0.12 of its total potential returns per unit of risk. Forestar Group is currently generating about 0.24 per unit of volatility. If you would invest 1,979 in Forestar Group on June 3, 2025 and sell it today you would earn a total of 788.00 from holding Forestar Group or generate 39.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
eXp World Holdings vs. Forestar Group
Performance |
| Timeline |
| eXp World Holdings |
| Forestar Group |
EXp World and Forestar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and Forestar
The main advantage of trading using opposite EXp World and Forestar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World position performs unexpectedly, Forestar 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 Forestar will offset losses from the drop in Forestar's long position.| EXp World vs. Real Brokerage | EXp World vs. Opendoor Technologies | EXp World vs. Re Max Holding | EXp World vs. Anywhere Real Estate |
| Forestar vs. American Realty Investors | Forestar vs. AMREP | Forestar vs. Five Point Holdings | Forestar vs. Franklin Street Properties |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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