Correlation Between Flushing Financial and Axos Financial
Can any of the company-specific risk be diversified away by investing in both Flushing Financial and Axos Financial 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 Flushing Financial and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flushing Financial and Axos Financial, you can compare the effects of market volatilities on Flushing Financial and Axos Financial 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 Flushing Financial with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flushing Financial and Axos Financial.
Diversification Opportunities for Flushing Financial and Axos Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flushing and Axos is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Flushing Financial and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Flushing Financial 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 Flushing Financial are associated (or correlated) with Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of Flushing Financial i.e., Flushing Financial and Axos Financial go up and down completely randomly.
Pair Corralation between Flushing Financial and Axos Financial
Given the investment horizon of 90 days Flushing Financial is expected to generate 1.79 times more return on investment than Axos Financial. However, Flushing Financial is 1.79 times more volatile than Axos Financial. It trades about -0.01 of its potential returns per unit of risk. Axos Financial is currently generating about -0.02 per unit of risk. If you would invest 1,182 in Flushing Financial on January 25, 2024 and sell it today you would lose (14.00) from holding Flushing Financial or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flushing Financial vs. Axos Financial
Performance |
| Timeline |
| Flushing Financial |
| Axos Financial |
Flushing Financial and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flushing Financial and Axos Financial
The main advantage of trading using opposite Flushing Financial and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flushing Financial position performs unexpectedly, Axos Financial 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 Axos Financial will offset losses from the drop in Axos Financial's long position.| Flushing Financial vs. Independent Bank | Flushing Financial vs. First Financial Bancorp | Flushing Financial vs. Lakeland Financial | Flushing Financial vs. National Bank Holdings |
| Axos Financial vs. National Bank Holdings | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Capital | Axos Financial vs. Home Bancorp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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