Correlation Between Axos Financial and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Axos Financial and First Hawaiian 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 First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and First Hawaiian, you can compare the effects of market volatilities on Axos Financial and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and First Hawaiian.
Diversification Opportunities for Axos Financial and First Hawaiian
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and First is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Axos Financial i.e., Axos Financial and First Hawaiian go up and down completely randomly.
Pair Corralation between Axos Financial and First Hawaiian
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.88 times less return on investment than First Hawaiian. In addition to that, Axos Financial is 1.68 times more volatile than First Hawaiian. It trades about 0.16 of its total potential returns per unit of risk. First Hawaiian is currently generating about 0.51 per unit of volatility. If you would invest 2,507 in First Hawaiian on November 9, 2024 and sell it today you would earn a total of 311.00 from holding First Hawaiian or generate 12.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. First Hawaiian
Performance |
| Timeline |
| Axos Financial |
| First Hawaiian |
Axos Financial and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and First Hawaiian
The main advantage of trading using opposite Axos Financial and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian'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 |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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