Correlation Between Axos Financial and Envestnet

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

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

Diversification Opportunities for Axos Financial and Envestnet

0.0

Correlation Coefficient

Axos Financial  Envestnet

Pay attention - limited upside

The 3 months correlation between Axos and Envestnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Envestnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envestnet 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 Envestnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envestnet has no effect on the direction of Axos Financial i.e., Axos Financial and Envestnet go up and down completely randomly.

Pair Corralation between Axos Financial and Envestnet

If you would invest (100.00) in Envestnet on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Envestnet or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Axos Financial  vs.  Envestnet

Axos Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axos Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Envestnet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Envestnet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Envestnet is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Axos Financial and Envestnet

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

The idea behind Axos Financial and Envestnet 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.