Correlation Between Axos Financial and Value Line

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

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

Diversification Opportunities for Axos Financial and Value Line

-0.37

Correlation Coefficient

Axos Financial  Value Line

Very good diversification

The 3 months correlation between Axos and Value is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line has no effect on the direction of Axos Financial i.e., Axos Financial and Value Line go up and down completely randomly.

Pair Corralation between Axos Financial and Value Line

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 0.91 times more return on investment than Value Line. However, Axos Financial is 1.1 times less risky than Value Line. It trades about 0.25 of its potential returns per unit of risk. Value Line is currently generating about -0.03 per unit of risk. If you would invest  6,550  in Axos Financial on May 1, 2025 and sell it today you would earn a total of  2,010  from holding Axos Financial or generate 30.69% 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.  Value Line

Axos Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 19 (%) 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.

Value Line

Risk-Adjusted Performance

Very Weak

Over the last 90 days Value Line has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Value Line is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Axos Financial and Value Line

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

The idea behind Axos Financial and Value Line 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.