Correlation Between FVCBankcorp and Axos Financial

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

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

Diversification Opportunities for FVCBankcorp and Axos Financial

0.91

Correlation Coefficient

FVCBankcorp  Axos Financial

Almost no diversification

The 3 months correlation between FVCBankcorp and Axos is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding FVCBankcorp and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and FVCBankcorp 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 FVCBankcorp 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 FVCBankcorp i.e., FVCBankcorp and Axos Financial go up and down completely randomly.

Pair Corralation between FVCBankcorp and Axos Financial

Given the investment horizon of 90 days FVCBankcorp is expected to generate 1.58 times less return on investment than Axos Financial. In addition to that, FVCBankcorp is 1.01 times more volatile than Axos Financial. It trades about 0.14 of its total potential returns per unit of risk. Axos Financial is currently generating about 0.22 per unit of volatility. If you would invest  7,156  in Axos Financial on May 24, 2025 and sell it today you would earn a total of  1,918  from holding Axos Financial or generate 26.8% return on investment over 90 days.

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

FVCBankcorp  vs.  Axos Financial

FVCBankcorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FVCBankcorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, FVCBankcorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Axos Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 17 (%) 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 FVCBankcorp and Axos Financial

The main advantage of trading using opposite FVCBankcorp and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FVCBankcorp 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 FVCBankcorp 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.