Correlation Between Axos Financial and Timberland Bancorp
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Timberland 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 Timberland 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 Timberland Bancorp, you can compare the effects of market volatilities on Axos Financial and Timberland 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 Timberland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Timberland Bancorp.
Diversification Opportunities for Axos Financial and Timberland Bancorp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Axos and Timberland is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Timberland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timberland 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 Timberland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timberland Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Timberland Bancorp go up and down completely randomly.
Pair Corralation between Axos Financial and Timberland Bancorp
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.6 times more return on investment than Timberland Bancorp. However, Axos Financial is 1.6 times more volatile than Timberland Bancorp. It trades about 0.22 of its potential returns per unit of risk. Timberland Bancorp is currently generating about 0.2 per unit of risk. If you would invest 6,772 in Axos Financial on September 1, 2024 and sell it today you would earn a total of 1,513 from holding Axos Financial or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Axos Financial vs. Timberland Bancorp
Performance |
| Timeline |
| Axos Financial |
| Timberland Bancorp |
Axos Financial and Timberland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Timberland Bancorp
The main advantage of trading using opposite Axos Financial and Timberland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Timberland 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 Timberland Bancorp will offset losses from the drop in Timberland 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 |
| Timberland Bancorp vs. First Financial Northwest | Timberland Bancorp vs. FVCBankcorp | Timberland Bancorp vs. Community West Bancshares | Timberland Bancorp vs. Sierra 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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