Correlation Between Axos Financial and Westbury Bancorp

Can any of the company-specific risk be diversified away by investing in both Axos Financial and Westbury 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 Westbury 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 Westbury Bancorp, you can compare the effects of market volatilities on Axos Financial and Westbury 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 Westbury Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and Westbury Bancorp.

Diversification Opportunities for Axos Financial and Westbury Bancorp

0.26

Correlation Coefficient

Axos Financial  Westbury Bancorp

Modest diversification

The 3 months correlation between Axos and Westbury is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and Westbury Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westbury 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 Westbury Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westbury Bancorp has no effect on the direction of Axos Financial i.e., Axos Financial and Westbury Bancorp go up and down completely randomly.

Pair Corralation between Axos Financial and Westbury Bancorp

If you would invest  7,149  in Axos Financial on October 24, 2024 and sell it today you would lose (11.00) from holding Axos Financial or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Axos Financial  vs.  Westbury Bancorp

Axos Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Axos Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Westbury Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Axos Financial and Westbury Bancorp

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

The idea behind Axos Financial and Westbury 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.