Correlation Between Axos Financial and BancFirst
Can any of the company-specific risk be diversified away by investing in both Axos Financial and BancFirst 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 BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and BancFirst, you can compare the effects of market volatilities on Axos Financial and BancFirst 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 BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and BancFirst.
Diversification Opportunities for Axos Financial and BancFirst
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and BancFirst is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst 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 BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Axos Financial i.e., Axos Financial and BancFirst go up and down completely randomly.
Pair Corralation between Axos Financial and BancFirst
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 2.7 times less return on investment than BancFirst. In addition to that, Axos Financial is 1.25 times more volatile than BancFirst. It trades about 0.02 of its total potential returns per unit of risk. BancFirst is currently generating about 0.07 per unit of volatility. If you would invest 10,347 in BancFirst on November 2, 2024 and sell it today you would earn a total of 1,546 from holding BancFirst or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. BancFirst
Performance |
| Timeline |
| Axos Financial |
| BancFirst |
Axos Financial and BancFirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and BancFirst
The main advantage of trading using opposite Axos Financial and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, BancFirst 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 BancFirst will offset losses from the drop in BancFirst's long position.| Axos Financial vs. National Bank Holdings | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Capital | Axos Financial vs. Home Bancorp |
| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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