Correlation Between Chicago Atlantic and ServisFirst Bancshares

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

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

Diversification Opportunities for Chicago Atlantic and ServisFirst Bancshares

0.72

Correlation Coefficient

Chicago Atlantic  ServisFirst Bancshares

Poor diversification

The 3 months correlation between Chicago and ServisFirst is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and ServisFirst Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServisFirst Bancshares and Chicago Atlantic 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 Chicago Atlantic BDC, 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 Chicago Atlantic i.e., Chicago Atlantic and ServisFirst Bancshares go up and down completely randomly.

Pair Corralation between Chicago Atlantic and ServisFirst Bancshares

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to generate 1.3 times more return on investment than ServisFirst Bancshares. However, Chicago Atlantic is 1.3 times more volatile than ServisFirst Bancshares. It trades about 0.05 of its potential returns per unit of risk. ServisFirst Bancshares is currently generating about -0.01 per unit of risk. If you would invest  967.00  in Chicago Atlantic BDC, on May 10, 2025 and sell it today you would earn a total of  50.00  from holding Chicago Atlantic BDC, or generate 5.17% return on investment over 90 days.

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

Chicago Atlantic BDC,  vs.  ServisFirst Bancshares

Chicago Atlantic BDC,

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Chicago Atlantic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

ServisFirst Bancshares

Risk-Adjusted Performance

Soft

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 Chicago Atlantic and ServisFirst Bancshares

The main advantage of trading using opposite Chicago Atlantic and ServisFirst Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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 Chicago Atlantic BDC, 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.