Correlation Between Axos Financial and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Heartland Financial 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 Heartland Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Heartland Financial USA, you can compare the effects of market volatilities on Axos Financial and Heartland Financial 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Heartland Financial.
Diversification Opportunities for Axos Financial and Heartland Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axos and Heartland is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of Axos Financial i.e., Axos Financial and Heartland Financial go up and down completely randomly.
Pair Corralation between Axos Financial and Heartland Financial
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.36 times more return on investment than Heartland Financial. However, Axos Financial is 1.36 times more volatile than Heartland Financial USA. It trades about 0.2 of its potential returns per unit of risk. Heartland Financial USA is currently generating about 0.18 per unit of risk. If you would invest 6,244 in Axos Financial on August 26, 2024 and sell it today you would earn a total of 2,222 from holding Axos Financial or generate 35.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. Heartland Financial USA
Performance |
| Timeline |
| Axos Financial |
| Heartland Financial USA |
Axos Financial and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Heartland Financial
The main advantage of trading using opposite Axos Financial and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Heartland Financial 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 Heartland Financial will offset losses from the drop in Heartland Financial'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 |
| Heartland Financial vs. Heritage Commerce Corp | Heartland Financial vs. Business First Bancshares | Heartland Financial vs. German American Bancorp | Heartland Financial vs. Texas Capital Bancshares |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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