Correlation Between ServisFirst Bancshares and SouthState

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

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

Diversification Opportunities for ServisFirst Bancshares and SouthState

0.9

Correlation Coefficient

ServisFirst Bancshares  SouthState

Almost no diversification

The 3 months correlation between ServisFirst and SouthState is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ServisFirst Bancshares and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState and ServisFirst Bancshares 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 ServisFirst Bancshares are associated (or correlated) with SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of ServisFirst Bancshares i.e., ServisFirst Bancshares and SouthState go up and down completely randomly.

Pair Corralation between ServisFirst Bancshares and SouthState

Given the investment horizon of 90 days ServisFirst Bancshares is expected to generate 1.0 times more return on investment than SouthState. However, ServisFirst Bancshares is 1.0 times less risky than SouthState. It trades about -0.04 of its potential returns per unit of risk. SouthState is currently generating about -0.07 per unit of risk. If you would invest  8,568  in ServisFirst Bancshares on December 23, 2024 and sell it today you would lose (390.00) from holding ServisFirst Bancshares or give up 4.55% of portfolio value over 90 days.

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

ServisFirst Bancshares  vs.  SouthState

ServisFirst Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days ServisFirst Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, ServisFirst Bancshares is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

SouthState

Risk-Adjusted Performance

Very Weak

Over the last 90 days SouthState has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ServisFirst Bancshares and SouthState

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

The idea behind ServisFirst Bancshares and SouthState 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..