Correlation Between NYSE Composite and Axos Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Axos Financial, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Axos Financial.
Diversification Opportunities for NYSE Composite and Axos Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Axos is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Axos Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Axos Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 8.16 times less return on investment than Axos Financial. But when comparing it to its historical volatility, NYSE Composite is 7.23 times less risky than Axos Financial. It trades about 0.24 of its potential returns per unit of risk. Axos Financial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,703 in Axos Financial on August 27, 2024 and sell it today you would earn a total of 1,957 from holding Axos Financial or generate 29.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Axos Financial
Performance |
| Timeline |
NYSE Composite and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Axos Financial
Pair trading matchups for Axos Financial
Pair Trading with NYSE Composite and Axos Financial
The main advantage of trading using opposite NYSE Composite and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Axos Financial vs. Fifth Third Bancorp | Axos Financial vs. Zions Bancorporation | Axos Financial vs. Huntington Bancshares Incorporated | Axos Financial vs. Comerica |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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