Correlation Between Axos Financial and SouthState
Can any of the company-specific risk be diversified away by investing in both Axos Financial and SouthState 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 SouthState into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and SouthState, you can compare the effects of market volatilities on Axos Financial and SouthState 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 SouthState. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and SouthState.
Diversification Opportunities for Axos Financial and SouthState
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axos and SouthState is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState 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 SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of Axos Financial i.e., Axos Financial and SouthState go up and down completely randomly.
Pair Corralation between Axos Financial and SouthState
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.4 times more return on investment than SouthState. However, Axos Financial is 1.4 times more volatile than SouthState. It trades about 0.24 of its potential returns per unit of risk. SouthState is currently generating about 0.16 per unit of risk. If you would invest 6,664 in Axos Financial on August 25, 2024 and sell it today you would earn a total of 1,802 from holding Axos Financial or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axos Financial vs. SouthState
Performance |
| Timeline |
| Axos Financial |
| SouthState |
Axos Financial and SouthState Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and SouthState
The main advantage of trading using opposite Axos Financial and SouthState positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, SouthState 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 SouthState will offset losses from the drop in SouthState's long position.| Axos Financial vs. Fifth Third Bancorp | Axos Financial vs. Zions Bancorporation | Axos Financial vs. Huntington Bancshares Incorporated | Axos Financial vs. PNC Financial Services |
| SouthState vs. Fifth Third Bancorp | SouthState vs. Zions Bancorporation | SouthState vs. Huntington Bancshares Incorporated | SouthState vs. PNC Financial Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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