Correlation Between Finward Bancorp and Axos Financial
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Axos 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 Finward Bancorp and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Axos Financial, you can compare the effects of market volatilities on Finward Bancorp and Axos 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 Finward Bancorp with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Axos Financial.
Diversification Opportunities for Finward Bancorp and Axos Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finward and Axos is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Finward Bancorp 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 Finward Bancorp are associated (or correlated) with Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Axos Financial go up and down completely randomly.
Pair Corralation between Finward Bancorp and Axos Financial
Given the investment horizon of 90 days Finward Bancorp is expected to generate 0.56 times more return on investment than Axos Financial. However, Finward Bancorp is 1.78 times less risky than Axos Financial. It trades about -0.05 of its potential returns per unit of risk. Axos Financial is currently generating about -0.12 per unit of risk. If you would invest 3,100 in Finward Bancorp on September 13, 2024 and sell it today you would lose (33.00) from holding Finward Bancorp or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Axos Financial
Performance |
| Timeline |
| Finward Bancorp |
| Axos Financial |
Finward Bancorp and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Axos Financial
The main advantage of trading using opposite Finward Bancorp and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Axos 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 Axos Financial will offset losses from the drop in Axos Financial's long position.| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
| Axos Financial vs. National Bank Holdings | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Capital | Axos Financial vs. Home 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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