Correlation Between Axos Financial and Pioneer Bancorp

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

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

Diversification Opportunities for Axos Financial and Pioneer Bancorp

0.29

Correlation Coefficient

Axos Financial  Pioneer Bancorp

Modest diversification

The 3 months correlation between Axos and Pioneer is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Pioneer Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bancorp 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 Pioneer Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Pioneer Bancorp go up and down completely randomly.

Pair Corralation between Axos Financial and Pioneer Bancorp

Allowing for the 90-day total investment horizon Axos Financial is expected to under-perform the Pioneer Bancorp. In addition to that, Axos Financial is 1.42 times more volatile than Pioneer Bancorp. It trades about -0.15 of its total potential returns per unit of risk. Pioneer Bancorp is currently generating about 0.12 per unit of volatility. If you would invest  1,120  in Pioneer Bancorp on December 5, 2024 and sell it today you would earn a total of  66.00  from holding Pioneer Bancorp or generate 5.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Axos Financial  vs.  Pioneer Bancorp

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pioneer Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Pioneer Bancorp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Axos Financial and Pioneer Bancorp

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

The idea behind Axos Financial and Pioneer Bancorp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.