Correlation Between Prosperity Bancshares and Axos Financial
Can any of the company-specific risk be diversified away by investing in both Prosperity Bancshares 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 Prosperity Bancshares and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosperity Bancshares and Axos Financial, you can compare the effects of market volatilities on Prosperity Bancshares 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 Prosperity Bancshares with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and Axos Financial.
Diversification Opportunities for Prosperity Bancshares and Axos Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prosperity and Axos is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity Bancshares and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Prosperity Bancshares 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 Prosperity Bancshares 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 Prosperity Bancshares i.e., Prosperity Bancshares and Axos Financial go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and Axos Financial
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 2.08 times less return on investment than Axos Financial. But when comparing it to its historical volatility, Prosperity Bancshares is 1.72 times less risky than Axos Financial. It trades about 0.1 of its potential returns per unit of risk. Axos Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,485 in Axos Financial on January 25, 2024 and sell it today you would earn a total of 1,797 from holding Axos Financial or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosperity Bancshares vs. Axos Financial
Performance |
| Timeline |
| Prosperity Bancshares |
| Axos Financial |
Prosperity Bancshares and Axos Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosperity Bancshares and Axos Financial
The main advantage of trading using opposite Prosperity Bancshares and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity Bancshares 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.| Prosperity Bancshares vs. Heartland Financial USA | Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |