Correlation Between Axos Financial and FirstCash

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

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

Diversification Opportunities for Axos Financial and FirstCash

0.59

Correlation Coefficient

Axos Financial  FirstCash

Very weak diversification

The 3 months correlation between Axos and FirstCash is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash 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 FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Axos Financial i.e., Axos Financial and FirstCash go up and down completely randomly.

Pair Corralation between Axos Financial and FirstCash

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.16 times more return on investment than FirstCash. However, Axos Financial is 1.16 times more volatile than FirstCash. It trades about 0.33 of its potential returns per unit of risk. FirstCash is currently generating about 0.11 per unit of risk. If you would invest  5,914  in Axos Financial on April 20, 2025 and sell it today you would earn a total of  2,639  from holding Axos Financial or generate 44.62% return on investment over 90 days.

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

Axos Financial  vs.  FirstCash

Axos Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 25 (%) 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.

FirstCash

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstCash are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, FirstCash may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Axos Financial and FirstCash

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

The idea behind Axos Financial and FirstCash 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.