Correlation Between Axos Financial and Farmers National
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Farmers National 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 Farmers National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Farmers National Banc, you can compare the effects of market volatilities on Axos Financial and Farmers National 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 Farmers National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Farmers National.
Diversification Opportunities for Axos Financial and Farmers National
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and Farmers is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Farmers National Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers National Banc 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 Farmers National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers National Banc has no effect on the direction of Axos Financial i.e., Axos Financial and Farmers National go up and down completely randomly.
Pair Corralation between Axos Financial and Farmers National
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.29 times more return on investment than Farmers National. However, Axos Financial is 1.29 times more volatile than Farmers National Banc. It trades about 0.11 of its potential returns per unit of risk. Farmers National Banc is currently generating about 0.06 per unit of risk. If you would invest 4,355 in Axos Financial on August 29, 2024 and sell it today you would earn a total of 4,084 from holding Axos Financial or generate 93.78% 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. Farmers National Banc
Performance |
| Timeline |
| Axos Financial |
| Farmers National Banc |
Axos Financial and Farmers National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Farmers National
The main advantage of trading using opposite Axos Financial and Farmers National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Farmers National 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 Farmers National will offset losses from the drop in Farmers National's long position.| Axos Financial vs. Fifth Third Bancorp | Axos Financial vs. Huntington Bancshares Incorporated | Axos Financial vs. MT Bank |
| Farmers National vs. Fifth Third Bancorp | Farmers National vs. Huntington Bancshares Incorporated | Farmers National vs. MT Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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