Correlation Between Axos Financial and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Axos Financial and ConnectOne Bancorp 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 ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and ConnectOne Bancorp, you can compare the effects of market volatilities on Axos Financial and ConnectOne Bancorp 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 ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and ConnectOne Bancorp.
Diversification Opportunities for Axos Financial and ConnectOne Bancorp
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and ConnectOne is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Axos Financial and ConnectOne Bancorp
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.08 times more return on investment than ConnectOne Bancorp. However, Axos Financial is 1.08 times more volatile than ConnectOne Bancorp. It trades about 0.12 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.06 per unit of risk. If you would invest 4,174 in Axos Financial on August 27, 2024 and sell it today you would earn a total of 4,292 from holding Axos Financial or generate 102.83% 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. ConnectOne Bancorp
Performance |
| Timeline |
| Axos Financial |
| ConnectOne Bancorp |
Axos Financial and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and ConnectOne Bancorp
The main advantage of trading using opposite Axos Financial and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, ConnectOne Bancorp 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp'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 |
| ConnectOne Bancorp vs. Rhinebeck Bancorp | ConnectOne Bancorp vs. Home Bancorp | ConnectOne Bancorp vs. Parke Bancorp | ConnectOne Bancorp vs. Great Southern 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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