Correlation Between Investcorp Europe and Swiftmerge Acquisition

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

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

Diversification Opportunities for Investcorp Europe and Swiftmerge Acquisition

-0.32

Correlation Coefficient

Investcorp Europe  Swiftmerge Acquisition

Very good diversification

The 3 months correlation between Investcorp and Swiftmerge is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Europe Acquisition and Swiftmerge Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiftmerge Acquisition and Investcorp Europe 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 Investcorp Europe Acquisition are associated (or correlated) with Swiftmerge Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiftmerge Acquisition has no effect on the direction of Investcorp Europe i.e., Investcorp Europe and Swiftmerge Acquisition go up and down completely randomly.

Pair Corralation between Investcorp Europe and Swiftmerge Acquisition

Assuming the 90 days horizon Investcorp Europe Acquisition is expected to generate 2.78 times more return on investment than Swiftmerge Acquisition. However, Investcorp Europe is 2.78 times more volatile than Swiftmerge Acquisition Corp. It trades about 0.12 of its potential returns per unit of risk. Swiftmerge Acquisition Corp is currently generating about 0.17 per unit of risk. If you would invest  3.60  in Investcorp Europe Acquisition on September 15, 2024 and sell it today you would lose (1.59) from holding Investcorp Europe Acquisition or give up 44.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.14%
Values	Daily Returns

Investcorp Europe Acquisition  vs.  Swiftmerge Acquisition Corp

Investcorp Europe

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Europe Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Investcorp Europe showed solid returns over the last few months and may actually be approaching a breakup point.

Swiftmerge Acquisition

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swiftmerge Acquisition Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swiftmerge Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Investcorp Europe and Swiftmerge Acquisition

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

The idea behind Investcorp Europe Acquisition and Swiftmerge Acquisition 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.