Correlation Between Axos Financial and Citizens Northern
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Citizens Northern 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 Citizens Northern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Citizens Northern Corp, you can compare the effects of market volatilities on Axos Financial and Citizens Northern 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 Citizens Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Citizens Northern.
Diversification Opportunities for Axos Financial and Citizens Northern
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axos and Citizens is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Citizens Northern Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Northern Corp 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 Citizens Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Northern Corp has no effect on the direction of Axos Financial i.e., Axos Financial and Citizens Northern go up and down completely randomly.
Pair Corralation between Axos Financial and Citizens Northern
Allowing for the 90-day total investment horizon Axos Financial is expected to under-perform the Citizens Northern. But the stock apears to be less risky and, when comparing its historical volatility, Axos Financial is 1.15 times less risky than Citizens Northern. The stock trades about -0.08 of its potential returns per unit of risk. The Citizens Northern Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,829 in Citizens Northern Corp on December 27, 2024 and sell it today you would earn a total of 207.00 from holding Citizens Northern Corp or generate 11.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Axos Financial vs. Citizens Northern Corp
Performance |
Timeline |
Axos Financial |
Citizens Northern Corp |
Axos Financial and Citizens Northern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axos Financial and Citizens Northern
The main advantage of trading using opposite Axos Financial and Citizens Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Citizens Northern 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 Citizens Northern will offset losses from the drop in Citizens Northern's long position.Axos Financial vs. National Bank Holdings | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Capital | Axos Financial vs. Home Bancorp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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