Correlation Between Axos Financial and Root
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Root 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 Root into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Root Inc, you can compare the effects of market volatilities on Axos Financial and Root 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 Root. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Root.
Diversification Opportunities for Axos Financial and Root
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axos and Root is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Root Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Root Inc 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 Root. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Root Inc has no effect on the direction of Axos Financial i.e., Axos Financial and Root go up and down completely randomly.
Pair Corralation between Axos Financial and Root
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.47 times more return on investment than Root. However, Axos Financial is 2.11 times less risky than Root. It trades about 0.31 of its potential returns per unit of risk. Root Inc is currently generating about 0.01 per unit of risk. If you would invest 6,099 in Axos Financial on April 22, 2025 and sell it today you would earn a total of 2,454 from holding Axos Financial or generate 40.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Axos Financial vs. Root Inc
Performance |
Timeline |
Axos Financial |
Root Inc |
Axos Financial and Root Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axos Financial and Root
The main advantage of trading using opposite Axos Financial and Root positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Root 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 Root will offset losses from the drop in Root's long position.Axos Financial vs. Live Oak Bancshares | Axos Financial vs. Ameris Bancorp | Axos Financial vs. Banner | Axos Financial vs. BancFirst |
Root vs. Skyward Specialty Insurance | Root vs. Selective Insurance Group | Root vs. American Coastal Insurance | Root vs. Lemonade |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |