Correlation Between Southern First and ServisFirst Bancshares
Can any of the company-specific risk be diversified away by investing in both Southern First and ServisFirst Bancshares 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 Southern First and ServisFirst Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern First Bancshares and ServisFirst Bancshares, you can compare the effects of market volatilities on Southern First and ServisFirst Bancshares 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 Southern First with a short position of ServisFirst Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern First and ServisFirst Bancshares.
Diversification Opportunities for Southern First and ServisFirst Bancshares
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southern and ServisFirst is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Southern First Bancshares and ServisFirst Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServisFirst Bancshares and Southern First 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 Southern First Bancshares are associated (or correlated) with ServisFirst Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServisFirst Bancshares has no effect on the direction of Southern First i.e., Southern First and ServisFirst Bancshares go up and down completely randomly.
Pair Corralation between Southern First and ServisFirst Bancshares
Given the investment horizon of 90 days Southern First is expected to generate 2.17 times less return on investment than ServisFirst Bancshares. In addition to that, Southern First is 1.31 times more volatile than ServisFirst Bancshares. It trades about 0.1 of its total potential returns per unit of risk. ServisFirst Bancshares is currently generating about 0.29 per unit of volatility. If you would invest 8,380 in ServisFirst Bancshares on November 9, 2024 and sell it today you would earn a total of 978.00 from holding ServisFirst Bancshares or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern First Bancshares vs. ServisFirst Bancshares
Performance |
| Timeline |
| Southern First Bancshares |
| ServisFirst Bancshares |
Southern First and ServisFirst Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern First and ServisFirst Bancshares
The main advantage of trading using opposite Southern First and ServisFirst Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern First position performs unexpectedly, ServisFirst Bancshares 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 ServisFirst Bancshares will offset losses from the drop in ServisFirst Bancshares' long position.| Southern First vs. First Community | Southern First vs. Old Point Financial | Southern First vs. Oak Valley Bancorp | Southern First vs. Chemung Financial Corp |
| ServisFirst Bancshares vs. Home BancShares | ServisFirst Bancshares vs. CNB Financial | ServisFirst Bancshares vs. SouthState | ServisFirst Bancshares vs. WSFS Financial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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