Correlation Between Axos Financial and WesBanco
Can any of the company-specific risk be diversified away by investing in both Axos Financial and WesBanco 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 WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and WesBanco, you can compare the effects of market volatilities on Axos Financial and WesBanco 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 WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and WesBanco.
Diversification Opportunities for Axos Financial and WesBanco
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and WesBanco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Axos Financial i.e., Axos Financial and WesBanco go up and down completely randomly.
Pair Corralation between Axos Financial and WesBanco
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 13.03 times more return on investment than WesBanco. However, Axos Financial is 13.03 times more volatile than WesBanco. It trades about 0.25 of its potential returns per unit of risk. WesBanco is currently generating about 0.14 per unit of risk. If you would invest 6,585 in Axos Financial on September 2, 2024 and sell it today you would earn a total of 1,700 from holding Axos Financial or generate 25.82% 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. WesBanco
Performance |
| Timeline |
| Axos Financial |
| WesBanco |
Axos Financial and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and WesBanco
The main advantage of trading using opposite Axos Financial and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco'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 |
| WesBanco vs. KeyCorp | WesBanco vs. KeyCorp | WesBanco vs. Fifth Third Bancorp | WesBanco vs. Citizens Financial Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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