Correlation Between International Bancshares and ServisFirst Bancshares

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

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

Diversification Opportunities for International Bancshares and ServisFirst Bancshares

0.88

Correlation Coefficient

International Bancshares  ServisFirst Bancshares

Very poor diversification

The 3 months correlation between International and ServisFirst is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding International Bancshares and ServisFirst Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServisFirst Bancshares and International 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 International 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 International Bancshares i.e., International Bancshares and ServisFirst Bancshares go up and down completely randomly.

Pair Corralation between International Bancshares and ServisFirst Bancshares

Given the investment horizon of 90 days International Bancshares is expected to under-perform the ServisFirst Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, International Bancshares is 1.19 times less risky than ServisFirst Bancshares. The stock trades about 0.0 of its potential returns per unit of risk. The ServisFirst Bancshares is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,205  in ServisFirst Bancshares on July 2, 2025 and sell it today you would lose (40.00) from holding ServisFirst Bancshares or give up 0.49% of portfolio value over 90 days.

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

International Bancshares  vs.  ServisFirst Bancshares

International Bancshares

Risk-Adjusted Performance

Weak

Over the last 90 days International Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, International Bancshares is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ServisFirst Bancshares

Risk-Adjusted Performance

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with International Bancshares and ServisFirst Bancshares

The main advantage of trading using opposite International Bancshares and ServisFirst Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bancshares 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.

The idea behind International Bancshares and ServisFirst Bancshares 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.