Correlation Between Axos Financial and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Investcorp Europe 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 Investcorp Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Investcorp Europe Acquisition, you can compare the effects of market volatilities on Axos Financial and Investcorp Europe 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 Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Investcorp Europe.
Diversification Opportunities for Axos Financial and Investcorp Europe
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axos and Investcorp is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe 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 Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Axos Financial i.e., Axos Financial and Investcorp Europe go up and down completely randomly.
Pair Corralation between Axos Financial and Investcorp Europe
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 78.84 times less return on investment than Investcorp Europe. But when comparing it to its historical volatility, Axos Financial is 42.18 times less risky than Investcorp Europe. It trades about 0.07 of its potential returns per unit of risk. Investcorp Europe Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Investcorp Europe Acquisition on August 29, 2024 and sell it today you would lose (3.72) from holding Investcorp Europe Acquisition or give up 74.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.42% |
| Values | Daily Returns |
Axos Financial vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| Axos Financial |
| Investcorp Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Axos Financial and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Investcorp Europe
The main advantage of trading using opposite Axos Financial and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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