Correlation Between Swvl Holdings and Global Business

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

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

Diversification Opportunities for Swvl Holdings and Global Business

0.17

Correlation Coefficient

Swvl Holdings  Global Business

Average diversification

The 3 months correlation between Swvl and Global is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and Global Business Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Business Travel and Swvl Holdings 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 Swvl Holdings Corp are associated (or correlated) with Global Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Business Travel has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and Global Business go up and down completely randomly.

Pair Corralation between Swvl Holdings and Global Business

Assuming the 90 days horizon Swvl Holdings Corp is expected to generate 29.85 times more return on investment than Global Business. However, Swvl Holdings is 29.85 times more volatile than Global Business Travel. It trades about 0.08 of its potential returns per unit of risk. Global Business Travel is currently generating about 0.07 per unit of risk. If you would invest  0.79  in Swvl Holdings Corp on September 18, 2024 and sell it today you would earn a total of  0.52  from holding Swvl Holdings Corp or generate 65.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.12%
Values	Daily Returns

Swvl Holdings Corp  vs.  Global Business Travel

Swvl Holdings Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swvl Holdings Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Swvl Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Business Travel

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Business Travel are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Global Business reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swvl Holdings and Global Business

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

The idea behind Swvl Holdings Corp and Global Business Travel 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.