Correlation Between Axos Financial and Stock Yards
Can any of the company-specific risk be diversified away by investing in both Axos Financial and Stock Yards 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 Stock Yards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and Stock Yards Bancorp, you can compare the effects of market volatilities on Axos Financial and Stock Yards 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 Stock Yards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Stock Yards.
Diversification Opportunities for Axos Financial and Stock Yards
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and Stock is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Stock Yards Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Yards 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 Stock Yards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Yards Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Stock Yards go up and down completely randomly.
Pair Corralation between Axos Financial and Stock Yards
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.27 times more return on investment than Stock Yards. However, Axos Financial is 1.27 times more volatile than Stock Yards Bancorp. It trades about 0.05 of its potential returns per unit of risk. Stock Yards Bancorp is currently generating about 0.05 per unit of risk. If you would invest 3,774 in Axos Financial on December 4, 2024 and sell it today you would earn a total of 2,839 from holding Axos Financial or generate 75.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Axos Financial vs. Stock Yards Bancorp
Performance |
Timeline |
Axos Financial |
Stock Yards Bancorp |
Axos Financial and Stock Yards Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axos Financial and Stock Yards
The main advantage of trading using opposite Axos Financial and Stock Yards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, Stock Yards 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 Stock Yards will offset losses from the drop in Stock Yards' long position.Axos Financial vs. National Bank Holdings | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Capital | Axos Financial vs. Home Bancorp |
Stock Yards vs. First National Corp | Stock Yards vs. Southern Missouri Bancorp | Stock Yards vs. Shore Bancshares | Stock Yards vs. First Capital |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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