Correlation Between Axos Financial and Bank of Hawaii
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Bank of Hawaii 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 Bank of Hawaii into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Bank of Hawaii, you can compare the effects of market volatilities on Axos Financial and Bank of Hawaii 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 Bank of Hawaii. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Bank of Hawaii.
Diversification Opportunities for Axos Financial and Bank of Hawaii
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axos and Bank is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Bank of Hawaii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Hawaii 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 Bank of Hawaii. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Hawaii has no effect on the direction of Axos Financial i.e., Axos Financial and Bank of Hawaii go up and down completely randomly.
Pair Corralation between Axos Financial and Bank of Hawaii
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.08 times more return on investment than Bank of Hawaii. However, Axos Financial is 1.08 times more volatile than Bank of Hawaii. It trades about 0.04 of its potential returns per unit of risk. Bank of Hawaii is currently generating about 0.02 per unit of risk. If you would invest 4,699 in Axos Financial on October 20, 2024 and sell it today you would earn a total of 2,507 from holding Axos Financial or generate 53.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. Bank of Hawaii
Performance |
| Timeline |
| Axos Financial |
| Bank of Hawaii |
Axos Financial and Bank of Hawaii Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Bank of Hawaii
The main advantage of trading using opposite Axos Financial and Bank of Hawaii positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Bank of Hawaii 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 Bank of Hawaii will offset losses from the drop in Bank of Hawaii'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 |
| Bank of Hawaii vs. Central Pacific Financial | Bank of Hawaii vs. Territorial Bancorp | Bank of Hawaii vs. First Bancorp | Bank of Hawaii vs. Hancock Whitney 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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