Correlation Between Axos Financial and First Republic
Can any of the company-specific risk be diversified away by investing in both Axos Financial and First Republic 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 Republic 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 Republic Bank, you can compare the effects of market volatilities on Axos Financial and First Republic 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 Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and First Republic.
Diversification Opportunities for Axos Financial and First Republic
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axos and First is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Axos Financial i.e., Axos Financial and First Republic go up and down completely randomly.
Pair Corralation between Axos Financial and First Republic
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.08 times more return on investment than First Republic. However, Axos Financial is 12.3 times less risky than First Republic. It trades about 0.04 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.04 per unit of risk. If you would invest 4,977 in Axos Financial on November 5, 2024 and sell it today you would earn a total of 2,016 from holding Axos Financial or generate 40.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 22.47% |
| Values | Daily Returns |
Axos Financial vs. First Republic Bank
Performance |
| Timeline |
| Axos Financial |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Axos Financial and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and First Republic
The main advantage of trading using opposite Axos Financial and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, First Republic 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 Republic will offset losses from the drop in First Republic'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 Republic vs. Mesa Air Group | First Republic vs. Hurco Companies | First Republic vs. Catalyst Metals Limited | First Republic vs. Broadleaf Co |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |