Correlation Between Axos Financial and Investar Holding
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Investar Holding 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 Investar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Investar Holding Corp, you can compare the effects of market volatilities on Axos Financial and Investar Holding 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 Investar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Investar Holding.
Diversification Opportunities for Axos Financial and Investar Holding
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and Investar is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Investar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investar Holding Corp 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 Investar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investar Holding Corp has no effect on the direction of Axos Financial i.e., Axos Financial and Investar Holding go up and down completely randomly.
Pair Corralation between Axos Financial and Investar Holding
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.98 times more return on investment than Investar Holding. However, Axos Financial is 1.02 times less risky than Investar Holding. It trades about 0.05 of its potential returns per unit of risk. Investar Holding Corp is currently generating about -0.25 per unit of risk. If you would invest 6,882 in Axos Financial on November 3, 2024 and sell it today you would earn a total of 111.00 from holding Axos Financial or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Axos Financial vs. Investar Holding Corp
Performance |
| Timeline |
| Axos Financial |
| Investar Holding Corp |
Axos Financial and Investar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Investar Holding
The main advantage of trading using opposite Axos Financial and Investar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Investar Holding 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 Investar Holding will offset losses from the drop in Investar Holding'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 |
| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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