Correlation Between Axos Financial and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Citizens Holding 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 Citizens Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Citizens Holding, you can compare the effects of market volatilities on Axos Financial and Citizens Holding 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 Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Citizens Holding.
Diversification Opportunities for Axos Financial and Citizens Holding
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axos and Citizens is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding 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 Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Axos Financial i.e., Axos Financial and Citizens Holding go up and down completely randomly.
Pair Corralation between Axos Financial and Citizens Holding
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.29 times more return on investment than Citizens Holding. However, Axos Financial is 1.29 times more volatile than Citizens Holding. It trades about 0.07 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.02 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 Against |
| Strength | Very Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Axos Financial vs. Citizens Holding
Performance |
| Timeline |
| Axos Financial |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Axos Financial and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Citizens Holding
The main advantage of trading using opposite Axos Financial and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Citizens Holding 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 Citizens Holding will offset losses from the drop in Citizens Holding'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 |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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