Correlation Between Axos Financial and MVB Financial
Can any of the company-specific risk be diversified away by investing in both Axos Financial and MVB 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 MVB 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 MVB Financial Corp, you can compare the effects of market volatilities on Axos Financial and MVB 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 MVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and MVB Financial.
Diversification Opportunities for Axos Financial and MVB Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and MVB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and MVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MVB Financial 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 MVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MVB Financial Corp has no effect on the direction of Axos Financial i.e., Axos Financial and MVB Financial go up and down completely randomly.
Pair Corralation between Axos Financial and MVB Financial
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.07 times more return on investment than MVB Financial. However, Axos Financial is 1.07 times more volatile than MVB Financial Corp. It trades about 0.05 of its potential returns per unit of risk. MVB Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 4,852 in Axos Financial on September 1, 2024 and sell it today you would earn a total of 3,433 from holding Axos Financial or generate 70.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. MVB Financial Corp
Performance |
| Timeline |
| Axos Financial |
| MVB Financial Corp |
Axos Financial and MVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and MVB Financial
The main advantage of trading using opposite Axos Financial and MVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, MVB 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 MVB Financial will offset losses from the drop in MVB 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 |
| MVB Financial vs. Community West Bancshares | MVB Financial vs. First Financial Northwest | MVB Financial vs. CF Bankshares | MVB Financial vs. Home Federal 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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