Correlation Between Consumer Portfolio and Axos Financial

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

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

Diversification Opportunities for Consumer Portfolio and Axos Financial

0.7

Correlation Coefficient

Consumer Portfolio  Axos Financial

Poor diversification

The 3 months correlation between Consumer and Axos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Portfolio Services and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Consumer Portfolio 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 Consumer Portfolio Services are associated (or correlated) with Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of Consumer Portfolio i.e., Consumer Portfolio and Axos Financial go up and down completely randomly.

Pair Corralation between Consumer Portfolio and Axos Financial

Given the investment horizon of 90 days Consumer Portfolio is expected to generate 3.26 times less return on investment than Axos Financial. In addition to that, Consumer Portfolio is 1.39 times more volatile than Axos Financial. It trades about 0.07 of its total potential returns per unit of risk. Axos Financial is currently generating about 0.3 per unit of volatility. 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Consumer Portfolio Services  vs.  Axos Financial

Consumer Portfolio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Consumer Portfolio Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Consumer Portfolio may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Axos Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 23 (%) 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.

Pair Trading with Consumer Portfolio and Axos Financial

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

The idea behind Consumer Portfolio Services and Axos Financial 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.