Correlation Between Axos Financial and Bank7 Corp
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Bank7 Corp 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 Bank7 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Bank7 Corp, you can compare the effects of market volatilities on Axos Financial and Bank7 Corp 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 Bank7 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Bank7 Corp.
Diversification Opportunities for Axos Financial and Bank7 Corp
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and Bank7 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Bank7 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank7 Corp 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 Bank7 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank7 Corp has no effect on the direction of Axos Financial i.e., Axos Financial and Bank7 Corp go up and down completely randomly.
Pair Corralation between Axos Financial and Bank7 Corp
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.36 times more return on investment than Bank7 Corp. However, Axos Financial is 1.36 times more volatile than Bank7 Corp. It trades about 0.07 of its potential returns per unit of risk. Bank7 Corp is currently generating about 0.07 per unit of risk. If you would invest 3,780 in Axos Financial on August 24, 2024 and sell it today you would earn a total of 4,689 from holding Axos Financial or generate 124.05% 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. Bank7 Corp
Performance |
| Timeline |
| Axos Financial |
| Bank7 Corp |
Axos Financial and Bank7 Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Bank7 Corp
The main advantage of trading using opposite Axos Financial and Bank7 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Bank7 Corp 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 Bank7 Corp will offset losses from the drop in Bank7 Corp'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 |
| Bank7 Corp vs. Home Federal Bancorp | Bank7 Corp vs. First Financial Northwest | Bank7 Corp vs. First Northwest Bancorp | Bank7 Corp vs. First Capital |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |