Correlation Between Henry Schein and Axos Financial
Can any of the company-specific risk be diversified away by investing in both Henry Schein 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 Henry Schein and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henry Schein and Axos Financial, you can compare the effects of market volatilities on Henry Schein 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 Henry Schein with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henry Schein and Axos Financial.
Diversification Opportunities for Henry Schein and Axos Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Henry and Axos is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Henry Schein and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Henry Schein 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 Henry Schein 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 Henry Schein i.e., Henry Schein and Axos Financial go up and down completely randomly.
Pair Corralation between Henry Schein and Axos Financial
Given the investment horizon of 90 days Henry Schein is expected to under-perform the Axos Financial. But the stock apears to be less risky and, when comparing its historical volatility, Henry Schein is 2.03 times less risky than Axos Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Axos Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,678 in Axos Financial on January 19, 2024 and sell it today you would earn a total of 1,208 from holding Axos Financial or generate 32.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henry Schein vs. Axos Financial
Performance |
| Timeline |
| Henry Schein |
| Axos Financial |
Henry Schein and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henry Schein and Axos Financial
The main advantage of trading using opposite Henry Schein and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henry Schein 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 Henry Schein 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.| 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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