Correlation Between Axos Financial and Peapack Gladstone

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

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

Diversification Opportunities for Axos Financial and Peapack Gladstone

0.91

Correlation Coefficient

Axos Financial  Peapack Gladstone

Almost no diversification

The 3 months correlation between Axos and Peapack is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone 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 Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of Axos Financial i.e., Axos Financial and Peapack Gladstone go up and down completely randomly.

Pair Corralation between Axos Financial and Peapack Gladstone

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.31 times less return on investment than Peapack Gladstone. In addition to that, Axos Financial is 1.15 times more volatile than Peapack Gladstone Financial. It trades about 0.11 of its total potential returns per unit of risk. Peapack Gladstone Financial is currently generating about 0.16 per unit of volatility. If you would invest  2,751  in Peapack Gladstone Financial on September 3, 2024 and sell it today you would earn a total of  863.00  from holding Peapack Gladstone Financial or generate 31.37% return on investment over 90 days.

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

Axos Financial  vs.  Peapack Gladstone Financial

Axos Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Axos Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Peapack Gladstone

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Peapack Gladstone Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Peapack Gladstone exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axos Financial and Peapack Gladstone

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

The idea behind Axos Financial and Peapack Gladstone 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.