Correlation Between Automatic Data and Swvl Holdings

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

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

Diversification Opportunities for Automatic Data and Swvl Holdings

0.47

Correlation Coefficient

Automatic Data  Swvl Holdings

Very weak diversification

The 3 months correlation between Automatic and Swvl is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing 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 Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and Swvl Holdings go up and down completely randomly.

Pair Corralation between Automatic Data and Swvl Holdings

Considering the 90-day investment horizon Automatic Data Processing is expected to generate 0.12 times more return on investment than Swvl Holdings. However, Automatic Data Processing is 8.15 times less risky than Swvl Holdings. It trades about 0.12 of its potential returns per unit of risk. Swvl Holdings Corp is currently generating about -0.01 per unit of risk. If you would invest  27,449  in Automatic Data Processing on September 18, 2024 and sell it today you would earn a total of  2,118  from holding Automatic Data Processing or generate 7.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.63%
Values	Daily Returns

Automatic Data Processing  vs.  Swvl Holdings Corp

Automatic Data Processing

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Automatic Data may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Swvl Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swvl Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Swvl Holdings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Automatic Data and Swvl Holdings

The main advantage of trading using opposite Automatic Data and Swvl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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 Automatic Data Processing 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.

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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.