Correlation Between Axos Financial and First Capital

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

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

Diversification Opportunities for Axos Financial and First Capital

-0.84

Correlation Coefficient

Axos Financial  First Capital

Pay attention - limited upside

The 3 months correlation between Axos and First is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Axos Financial i.e., Axos Financial and First Capital go up and down completely randomly.

Pair Corralation between Axos Financial and First Capital

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.61 times more return on investment than First Capital. However, Axos Financial is 1.63 times less risky than First Capital. It trades about 0.18 of its potential returns per unit of risk. First Capital is currently generating about -0.12 per unit of risk. If you would invest  7,156  in Axos Financial on May 25, 2025 and sell it today you would earn a total of  1,427  from holding Axos Financial or generate 19.94% return on investment over 90 days.

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

Axos Financial  vs.  First Capital

Axos Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 14 (%) 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.

First Capital

Risk-Adjusted Performance

Weakest

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Axos Financial and First Capital

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

The idea behind Axos Financial and First Capital 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.