Correlation Between Axos Financial and Bayfirst Financial

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

Diversification Opportunities for Axos Financial and Bayfirst Financial

-0.31

Correlation Coefficient

Axos Financial  Bayfirst Financial

Very good diversification

The 3 months correlation between Axos and Bayfirst is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Bayfirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayfirst Financial Corp 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 Bayfirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayfirst Financial Corp has no effect on the direction of Axos Financial i.e., Axos Financial and Bayfirst Financial go up and down completely randomly.

Pair Corralation between Axos Financial and Bayfirst Financial

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.43 times more return on investment than Bayfirst Financial. However, Axos Financial is 2.31 times less risky than Bayfirst Financial. It trades about 0.22 of its potential returns per unit of risk. Bayfirst Financial Corp is currently generating about -0.21 per unit of risk. If you would invest  6,967  in Axos Financial on May 22, 2025 and sell it today you would earn a total of  1,719  from holding Axos Financial or generate 24.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Axos Financial  vs.  Bayfirst Financial Corp

Axos Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Axos Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Bayfirst Financial Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Bayfirst Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Axos Financial and Bayfirst Financial

The main advantage of trading using opposite Axos Financial and Bayfirst Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Bayfirst 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 Bayfirst Financial will offset losses from the drop in Bayfirst Financial's long position.

The idea behind Axos Financial and Bayfirst Financial Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.