Correlation Between Axos Financial and BayCom Corp

Can any of the company-specific risk be diversified away by investing in both Axos Financial and BayCom Corp 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 BayCom Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axos Financial and BayCom Corp, you can compare the effects of market volatilities on Axos Financial and BayCom Corp 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 BayCom Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and BayCom Corp.

Diversification Opportunities for Axos Financial and BayCom Corp

0.89

Correlation Coefficient

Axos Financial  BayCom Corp

Very poor diversification

The 3 months correlation between Axos and BayCom is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and BayCom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BayCom 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 BayCom Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BayCom Corp has no effect on the direction of Axos Financial i.e., Axos Financial and BayCom Corp go up and down completely randomly.

Pair Corralation between Axos Financial and BayCom Corp

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.16 times more return on investment than BayCom Corp. However, Axos Financial is 1.16 times more volatile than BayCom Corp. It trades about 0.27 of its potential returns per unit of risk. BayCom Corp is currently generating about 0.07 per unit of risk. If you would invest  6,394  in Axos Financial on April 29, 2025 and sell it today you would earn a total of  2,185  from holding Axos Financial or generate 34.17% return on investment over 90 days.

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

Axos Financial  vs.  BayCom 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 21 (%) 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.

BayCom Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BayCom Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent primary indicators, BayCom Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Axos Financial and BayCom Corp

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

The idea behind Axos Financial and BayCom 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.