Correlation Between Axos Financial and TWFG,

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

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

Diversification Opportunities for Axos Financial and TWFG,

0.82

Correlation Coefficient

Axos Financial  TWFG,

Very poor diversification

The 3 months correlation between Axos and TWFG, is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of Axos Financial i.e., Axos Financial and TWFG, go up and down completely randomly.

Pair Corralation between Axos Financial and TWFG,

Allowing for the 90-day total investment horizon Axos Financial is expected to generate 1.27 times more return on investment than TWFG,. However, Axos Financial is 1.27 times more volatile than TWFG, Class A. It trades about 0.08 of its potential returns per unit of risk. TWFG, Class A is currently generating about 0.09 per unit of risk. If you would invest  6,811  in Axos Financial on September 19, 2024 and sell it today you would earn a total of  900.00  from holding Axos Financial or generate 13.21% return on investment over 90 days.

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

Axos Financial  vs.  TWFG, Class A

Axos Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axos Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Axos Financial showed solid returns over the last few months and may actually be approaching a breakup point.

TWFG, Class A

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TWFG, Class A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, TWFG, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axos Financial and TWFG,

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

The idea behind Axos Financial and TWFG, Class A 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.