Correlation Between KeyCorp and Axos Financial

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

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

Diversification Opportunities for KeyCorp and Axos Financial

0.79

Correlation Coefficient

KeyCorp  Axos Financial

Poor diversification

The 3 months correlation between KeyCorp and Axos is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KeyCorp and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and KeyCorp 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 KeyCorp 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 KeyCorp i.e., KeyCorp and Axos Financial go up and down completely randomly.

Pair Corralation between KeyCorp and Axos Financial

Assuming the 90 days trading horizon KeyCorp is expected to generate 20.7 times less return on investment than Axos Financial. But when comparing it to its historical volatility, KeyCorp is 3.55 times less risky than Axos Financial. It trades about 0.03 of its potential returns per unit of risk. Axos Financial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7,272  in Axos Financial on May 15, 2025 and sell it today you would earn a total of  1,664  from holding Axos Financial or generate 22.88% return on investment over 90 days.

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

KeyCorp  vs.  Axos Financial

KeyCorp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, KeyCorp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Axos Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 15 (%) 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 KeyCorp and Axos Financial

The main advantage of trading using opposite KeyCorp and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KeyCorp 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 KeyCorp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.