Correlation Between ServisFirst Bancshares and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both ServisFirst Bancshares and JPMorgan Chase 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 JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServisFirst Bancshares and JPMorgan Chase Co, you can compare the effects of market volatilities on ServisFirst Bancshares and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServisFirst Bancshares and JPMorgan Chase.
Diversification Opportunities for ServisFirst Bancshares and JPMorgan Chase
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ServisFirst and JPMorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ServisFirst Bancshares and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of ServisFirst Bancshares i.e., ServisFirst Bancshares and JPMorgan Chase go up and down completely randomly.
Pair Corralation between ServisFirst Bancshares and JPMorgan Chase
Given the investment horizon of 90 days ServisFirst Bancshares is expected to generate 1.05 times more return on investment than JPMorgan Chase. However, ServisFirst Bancshares is 1.05 times more volatile than JPMorgan Chase Co. It trades about 0.2 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.21 per unit of risk. If you would invest 8,447 in ServisFirst Bancshares on September 4, 2024 and sell it today you would earn a total of 1,082 from holding ServisFirst Bancshares or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
ServisFirst Bancshares vs. JPMorgan Chase Co
Performance |
| Timeline |
| ServisFirst Bancshares |
| JPMorgan Chase |
ServisFirst Bancshares and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServisFirst Bancshares and JPMorgan Chase
The main advantage of trading using opposite ServisFirst Bancshares and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServisFirst Bancshares position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.| ServisFirst Bancshares vs. International Bancshares | ServisFirst Bancshares vs. Finward Bancorp | ServisFirst Bancshares vs. Aquagold International | ServisFirst Bancshares vs. Thrivent High Yield |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Aquagold International | JPMorgan Chase vs. Thrivent High Yield | JPMorgan Chase vs. Morningstar Unconstrained Allocation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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