Correlation Between Axos Financial and Blue Foundry
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Blue Foundry 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 Blue Foundry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Blue Foundry Bancorp, you can compare the effects of market volatilities on Axos Financial and Blue Foundry 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 Blue Foundry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Blue Foundry.
Diversification Opportunities for Axos Financial and Blue Foundry
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and Blue is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Blue Foundry Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Foundry Bancorp 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 Blue Foundry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Foundry Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Blue Foundry go up and down completely randomly.
Pair Corralation between Axos Financial and Blue Foundry
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.64 times less return on investment than Blue Foundry. But when comparing it to its historical volatility, Axos Financial is 1.06 times less risky than Blue Foundry. It trades about 0.05 of its potential returns per unit of risk. Blue Foundry Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 948.00 in Blue Foundry Bancorp on November 3, 2024 and sell it today you would earn a total of 27.00 from holding Blue Foundry Bancorp or generate 2.85% 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. Blue Foundry Bancorp
Performance |
| Timeline |
| Axos Financial |
| Blue Foundry Bancorp |
Axos Financial and Blue Foundry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Blue Foundry
The main advantage of trading using opposite Axos Financial and Blue Foundry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Blue Foundry 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 Blue Foundry will offset losses from the drop in Blue Foundry'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 |
| Blue Foundry vs. Home Federal Bancorp | Blue Foundry vs. Lake Shore Bancorp | Blue Foundry vs. Community West Bancshares | Blue Foundry vs. Bogota Financial Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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