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

0.97

Correlation Coefficient

ServisFirst Bancshares  SouthState

Almost no diversification

The 3 months correlation between ServisFirst and SouthState is 0.97. 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 1.08 times less return on investment than SouthState. In addition to that, ServisFirst Bancshares is 1.1 times more volatile than SouthState. It trades about 0.07 of its total potential returns per unit of risk. SouthState is currently generating about 0.09 per unit of volatility. If you would invest  8,884  in SouthState on May 2, 2025 and sell it today you would earn a total of  708.00  from holding SouthState or generate 7.97% return on investment 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

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ServisFirst Bancshares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, ServisFirst Bancshares may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SouthState

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SouthState are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, SouthState may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.