Correlation Between Byline Bancorp and Axos Financial

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

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

Diversification Opportunities for Byline Bancorp and Axos Financial

0.77

Correlation Coefficient

Byline Bancorp  Axos Financial

Poor diversification

The 3 months correlation between Byline and Axos is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Byline Bancorp and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Byline Bancorp 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 Byline Bancorp are associated (or correlated) with Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of Byline Bancorp i.e., Byline Bancorp and Axos Financial go up and down completely randomly.

Pair Corralation between Byline Bancorp and Axos Financial

Allowing for the 90-day total investment horizon Byline Bancorp is expected to under-perform the Axos Financial. But the stock apears to be less risky and, when comparing its historical volatility, Byline Bancorp is 1.16 times less risky than Axos Financial. The stock trades about -0.24 of its potential returns per unit of risk. The Axos Financial is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  7,200  in Axos Financial on March 19, 2025 and sell it today you would lose (212.00) from holding Axos Financial or give up 2.94% of portfolio value over 90 days.

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

Byline Bancorp  vs.  Axos Financial

Byline Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Byline Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Byline Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Axos Financial

Risk-Adjusted Performance

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 may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Byline Bancorp and Axos Financial

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

The idea behind Byline Bancorp and Axos 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.