Correlation Between Axos Financial and Enterprise Financial
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Enterprise 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 Axos Financial and Enterprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Enterprise Financial Services, you can compare the effects of market volatilities on Axos Financial and Enterprise 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 Axos Financial with a short position of Enterprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Enterprise Financial.
Diversification Opportunities for Axos Financial and Enterprise Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axos and Enterprise is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial 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 Enterprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Financial has no effect on the direction of Axos Financial i.e., Axos Financial and Enterprise Financial go up and down completely randomly.
Pair Corralation between Axos Financial and Enterprise Financial
Allowing for the 90-day total investment horizon Axos Financial is expected to under-perform the Enterprise Financial. But the stock apears to be less risky and, when comparing its historical volatility, Axos Financial is 1.03 times less risky than Enterprise Financial. The stock trades about -0.15 of its potential returns per unit of risk. The Enterprise Financial Services is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,922 in Enterprise Financial Services on January 20, 2024 and sell it today you would lose (104.00) from holding Enterprise Financial Services or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Axos Financial vs. Enterprise Financial Services
Performance |
| Timeline |
| Axos Financial |
| Enterprise Financial |
Axos Financial and Enterprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and Enterprise Financial
The main advantage of trading using opposite Axos Financial and Enterprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Enterprise 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 Enterprise Financial will offset losses from the drop in Enterprise Financial's long position.| Axos Financial vs. Home Federal Bancorp | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Financial Northwest | Axos Financial vs. First Northwest 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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