Correlation Between Axos Financial and RBB Bancorp
Can any of the company-specific risk be diversified away by investing in both Axos Financial and RBB Bancorp 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 RBB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and RBB Bancorp, you can compare the effects of market volatilities on Axos Financial and RBB Bancorp 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 RBB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and RBB Bancorp.
Diversification Opportunities for Axos Financial and RBB Bancorp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and RBB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and RBB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB 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 RBB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and RBB Bancorp go up and down completely randomly.
Pair Corralation between Axos Financial and RBB Bancorp
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.91 times more return on investment than RBB Bancorp. However, Axos Financial is 1.1 times less risky than RBB Bancorp. It trades about 0.05 of its potential returns per unit of risk. RBB Bancorp is currently generating about -0.15 per unit of risk. If you would invest 7,112 in Axos Financial on October 20, 2024 and sell it today you would earn a total of 94.00 from holding Axos Financial or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. RBB Bancorp
Performance |
| Timeline |
| Axos Financial |
| RBB Bancorp |
Axos Financial and RBB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and RBB Bancorp
The main advantage of trading using opposite Axos Financial and RBB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, RBB Bancorp 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 RBB Bancorp will offset losses from the drop in RBB Bancorp'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 |
| RBB Bancorp vs. OP Bancorp | RBB Bancorp vs. Hanmi Financial | RBB Bancorp vs. Hope Bancorp | RBB Bancorp vs. Northeast 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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