Correlation Between Axos Financial and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Axos Financial and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axos Financial and KeyCorp, you can compare the effects of market volatilities on Axos Financial and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axos Financial and KeyCorp.
Diversification Opportunities for Axos Financial and KeyCorp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axos and KeyCorp is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axos Financial and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Axos Financial i.e., Axos Financial and KeyCorp go up and down completely randomly.
Pair Corralation between Axos Financial and KeyCorp
Allowing for the 90-day total investment horizon Axos Financial is expected to generate 3.56 times more return on investment than KeyCorp. However, Axos Financial is 3.56 times more volatile than KeyCorp. It trades about 0.33 of its potential returns per unit of risk. KeyCorp is currently generating about 0.12 per unit of risk. If you would invest 5,914 in Axos Financial on April 19, 2025 and sell it today you would earn a total of 2,642 from holding Axos Financial or generate 44.67% 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. KeyCorp
Performance |
| Timeline |
| Axos Financial |
| KeyCorp |
Axos Financial and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axos Financial and KeyCorp
The main advantage of trading using opposite Axos Financial and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axos Financial position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| Axos Financial vs. Northfield Bancorp | Axos Financial vs. Community West Bancshares | Axos Financial vs. First Community | Axos Financial vs. LINKBANCORP |
| KeyCorp vs. ConnectOne Bancorp | KeyCorp vs. Huntington Bancshares Incorporated | KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. US Bancorp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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