Correlation Between Axos Financial and Eagle Financial

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Can any of the company-specific risk be diversified away by investing in both Axos Financial and Eagle 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 Eagle 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 Eagle Financial Services, you can compare the effects of market volatilities on Axos Financial and Eagle 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 Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Eagle Financial.

Diversification Opportunities for Axos Financial and Eagle Financial

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Axos and Eagle is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Axos Financial i.e., Axos Financial and Eagle Financial go up and down completely randomly.

Pair Corralation between Axos Financial and Eagle Financial

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.33 times more return on investment than Eagle Financial. However, Axos Financial is 1.33 times more volatile than Eagle Financial Services. It trades about 0.03 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.0 per unit of risk. If you would invest  4,031  in Axos Financial on December 30, 2023 and sell it today you would earn a total of  1,373  from holding Axos Financial or generate 34.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy84.41%
ValuesDaily Returns

Axos Financial  vs.  Eagle Financial Services

 Performance 
       Timeline  
Axos Financial 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Axos Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axos Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Eagle Financial Services 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days Eagle Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eagle Financial is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Axos Financial and Eagle Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axos Financial and Eagle Financial

The main advantage of trading using opposite Axos Financial and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Eagle 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.
The idea behind Axos Financial and Eagle Financial Services 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.
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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