Correlation Between Varex Imaging and ServisFirst Bancshares

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

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

Diversification Opportunities for Varex Imaging and ServisFirst Bancshares

-0.06

Correlation Coefficient

Varex Imaging  ServisFirst Bancshares

Good diversification

The 3 months correlation between Varex and ServisFirst is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and ServisFirst Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServisFirst Bancshares and Varex Imaging 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 Varex Imaging Corp 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 Varex Imaging i.e., Varex Imaging and ServisFirst Bancshares go up and down completely randomly.

Pair Corralation between Varex Imaging and ServisFirst Bancshares

Given the investment horizon of 90 days Varex Imaging is expected to generate 1.05 times less return on investment than ServisFirst Bancshares. In addition to that, Varex Imaging is 1.74 times more volatile than ServisFirst Bancshares. It trades about 0.03 of its total potential returns per unit of risk. ServisFirst Bancshares is currently generating about 0.05 per unit of volatility. 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

Varex Imaging Corp  vs.  ServisFirst Bancshares

Varex Imaging Corp

Risk-Adjusted Performance

Weakest

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.

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.

Pair Trading with Varex Imaging and ServisFirst Bancshares

The main advantage of trading using opposite Varex Imaging and ServisFirst Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging 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 Varex Imaging Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.