Correlation Between GM and ServisFirst Bancshares

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

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

Diversification Opportunities for GM and ServisFirst Bancshares

-0.83

Correlation Coefficient

GM  ServisFirst Bancshares

Pay attention - limited upside

The 3 months correlation between GM and ServisFirst is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and ServisFirst Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServisFirst Bancshares and GM 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 General Motors 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 GM i.e., GM and ServisFirst Bancshares go up and down completely randomly.

Pair Corralation between GM and ServisFirst Bancshares

Allowing for the 90-day total investment horizon General Motors is expected to generate 1.22 times more return on investment than ServisFirst Bancshares. However, GM is 1.22 times more volatile than ServisFirst Bancshares. It trades about 0.19 of its potential returns per unit of risk. ServisFirst Bancshares is currently generating about -0.13 per unit of risk. If you would invest  5,808  in General Motors on September 7, 2025 and sell it today you would earn a total of  1,797  from holding General Motors or generate 30.94% return on investment over 90 days.

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

General Motors  vs.  ServisFirst Bancshares

General Motors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Motors are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, GM displayed solid returns over the last few months and may actually be approaching a breakup point.

ServisFirst Bancshares

Risk-Adjusted Performance

Weakest

Over the last 90 days ServisFirst Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2026. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GM and ServisFirst Bancshares

The main advantage of trading using opposite GM and ServisFirst Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.