Correlation Between ServisFirst Bancshares and Varex Imaging

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

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

Diversification Opportunities for ServisFirst Bancshares and Varex Imaging

-0.06

Correlation Coefficient

ServisFirst Bancshares  Varex Imaging

Good diversification

The 3 months correlation between ServisFirst and Varex is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ServisFirst Bancshares and Varex Imaging Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varex Imaging Corp 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 Varex Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varex Imaging Corp has no effect on the direction of ServisFirst Bancshares i.e., ServisFirst Bancshares and Varex Imaging go up and down completely randomly.

Pair Corralation between ServisFirst Bancshares and Varex Imaging

Given the investment horizon of 90 days ServisFirst Bancshares is expected to generate 0.57 times more return on investment than Varex Imaging. However, ServisFirst Bancshares is 1.74 times less risky than Varex Imaging. It trades about 0.05 of its potential returns per unit of risk. Varex Imaging Corp is currently generating about 0.03 per unit of risk. If you would invest  7,424  in ServisFirst Bancshares on May 9, 2025 and sell it today you would earn a total of  336.00  from holding ServisFirst Bancshares or generate 4.53% return on investment over 90 days.

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

ServisFirst Bancshares  vs.  Varex Imaging Corp

ServisFirst Bancshares

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ServisFirst Bancshares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Varex Imaging Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Varex Imaging Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Varex Imaging is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ServisFirst Bancshares and Varex Imaging

The main advantage of trading using opposite ServisFirst Bancshares and Varex Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServisFirst Bancshares position performs unexpectedly, Varex Imaging 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 Varex Imaging will offset losses from the drop in Varex Imaging's long position.

The idea behind ServisFirst Bancshares and Varex Imaging Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.