Correlation Between ADEIA P and Swvl Holdings

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

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

Diversification Opportunities for ADEIA P and Swvl Holdings

-0.25

Correlation Coefficient

ADEIA P  Swvl Holdings

Very good diversification

The 3 months correlation between ADEIA and Swvl is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ADEIA P and Swvl Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swvl Holdings Corp and ADEIA P 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 ADEIA P are associated (or correlated) with Swvl Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swvl Holdings Corp has no effect on the direction of ADEIA P i.e., ADEIA P and Swvl Holdings go up and down completely randomly.

Pair Corralation between ADEIA P and Swvl Holdings

Given the investment horizon of 90 days ADEIA P is expected to generate 0.37 times more return on investment than Swvl Holdings. However, ADEIA P is 2.67 times less risky than Swvl Holdings. It trades about 0.09 of its potential returns per unit of risk. Swvl Holdings Corp is currently generating about 0.02 per unit of risk. If you would invest  1,217  in ADEIA P on September 20, 2024 and sell it today you would earn a total of  159.00  from holding ADEIA P or generate 13.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

ADEIA P  vs.  Swvl Holdings Corp

ADEIA P

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, ADEIA P sustained solid returns over the last few months and may actually be approaching a breakup point.

Swvl Holdings Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Swvl Holdings Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Swvl Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADEIA P and Swvl Holdings

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

The idea behind ADEIA P and Swvl Holdings 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.

Check out your portfolio center.

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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.