Correlation Between Axos Financial and Home Federal
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Home Federal 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 Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Home Federal Bancorp, you can compare the effects of market volatilities on Axos Financial and Home Federal 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 Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Home Federal.
Diversification Opportunities for Axos Financial and Home Federal
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axos and Home is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal 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 Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Home Federal go up and down completely randomly.
Pair Corralation between Axos Financial and Home Federal
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.99 times more return on investment than Home Federal. However, Axos Financial is 1.01 times less risky than Home Federal. It trades about 0.06 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about 0.01 per unit of risk. If you would invest 5,186 in Axos Financial on November 9, 2024 and sell it today you would earn a total of 2,124 from holding Axos Financial or generate 40.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.89% |
| Values | Daily Returns |
Axos Financial vs. Home Federal Bancorp
Performance |
| Timeline |
| Axos Financial |
| Home Federal Bancorp |
Axos Financial and Home Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Home Federal
The main advantage of trading using opposite Axos Financial and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Home Federal 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 Home Federal will offset losses from the drop in Home Federal'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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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