Correlation Between Axos Financial and Bancorp Of

Can any of the company-specific risk be diversified away by investing in both Axos Financial and Bancorp Of 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 Axos Financial and Bancorp Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axos Financial and Bancorp Of New, you can compare the effects of market volatilities on Axos Financial and Bancorp Of 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 Axos Financial with a short position of Bancorp Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Bancorp Of.

Diversification Opportunities for Axos Financial and Bancorp Of

0.0

Correlation Coefficient

Axos Financial  Bancorp Of

Pay attention - limited upside

The 3 months correlation between Axos and Bancorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Bancorp Of New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancorp Of New and Axos 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 Axos Financial are associated (or correlated) with Bancorp Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancorp Of New has no effect on the direction of Axos Financial i.e., Axos Financial and Bancorp Of go up and down completely randomly.

Pair Corralation between Axos Financial and Bancorp Of

If you would invest  5,243  in Axos Financial on February 1, 2024 and sell it today you would earn a total of  307.00  from holding Axos Financial or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Axos Financial  vs.  Bancorp Of New

Axos Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axos Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axos Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bancorp Of New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bancorp Of New has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking signals, Bancorp Of is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Axos Financial and Bancorp Of

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

The idea behind Axos Financial and Bancorp Of New 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.