Correlation Between Regions Financial and Axos Financial

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Can any of the company-specific risk be diversified away by investing in both Regions Financial 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 Regions Financial and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Axos Financial, you can compare the effects of market volatilities on Regions Financial 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 Regions Financial with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Axos Financial.

Diversification Opportunities for Regions Financial and Axos Financial

RegionsAxosDiversified AwayRegionsAxosDiversified Away100%
0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Regions and Axos is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Regions 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 Regions Financial 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 Regions Financial i.e., Regions Financial and Axos Financial go up and down completely randomly.

Pair Corralation between Regions Financial and Axos Financial

Allowing for the 90-day total investment horizon Regions Financial is expected to generate 0.75 times more return on investment than Axos Financial. However, Regions Financial is 1.33 times less risky than Axos Financial. It trades about -0.2 of its potential returns per unit of risk. Axos Financial is currently generating about -0.27 per unit of risk. If you would invest  2,477  in Regions Financial on November 27, 2024 and sell it today you would lose (129.50) from holding Regions Financial or give up 5.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Regions Financial  vs.  Axos Financial

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15RF AX
       Timeline  
Regions Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Regions Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2324252627
Axos Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Axos Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb70758085

Regions Financial and Axos Financial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.46-1.88-1.3-0.72-0.140.40.971.542.112.68 0.080.100.120.140.160.18
JavaScript chart by amCharts 3.21.15RF AX
       Returns  

Pair Trading with Regions Financial and Axos Financial

The main advantage of trading using opposite Regions Financial and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial 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.
The idea behind Regions Financial and Axos Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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