Correlation Between Axos Financial and First Internet
Can any of the company-specific risk be diversified away by investing in both Axos Financial and First Internet 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 Internet 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 Internet Bancorp, you can compare the effects of market volatilities on Axos Financial and First Internet 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 Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and First Internet.
Diversification Opportunities for Axos Financial and First Internet
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axos and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet 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 First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and First Internet go up and down completely randomly.
Pair Corralation between Axos Financial and First Internet
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.93 times more return on investment than First Internet. However, Axos Financial is 1.08 times less risky than First Internet. It trades about -0.04 of its potential returns per unit of risk. First Internet Bancorp is currently generating about -0.15 per unit of risk. If you would invest 7,247 in Axos Financial on October 25, 2024 and sell it today you would lose (115.00) from holding Axos Financial or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. First Internet Bancorp
Performance |
| Timeline |
| Axos Financial |
| First Internet Bancorp |
Axos Financial and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and First Internet
The main advantage of trading using opposite Axos Financial and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, First Internet 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 Internet will offset losses from the drop in First Internet'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 Internet vs. First Capital | First Internet vs. Finward Bancorp | First Internet vs. Community West Bancshares | First Internet vs. QCR Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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