Correlation Between Swvl Holdings and Guidewire Software

Can any of the company-specific risk be diversified away by investing in both Swvl Holdings and Guidewire Software 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 Guidewire Software 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 Guidewire Software, you can compare the effects of market volatilities on Swvl Holdings and Guidewire Software 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 Guidewire Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swvl Holdings and Guidewire Software.

Diversification Opportunities for Swvl Holdings and Guidewire Software

0.63

Correlation Coefficient

Swvl Holdings  Guidewire Software

Poor diversification

The 3 months correlation between Swvl and Guidewire is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and Guidewire Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidewire Software 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 Guidewire Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidewire Software has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and Guidewire Software go up and down completely randomly.

Pair Corralation between Swvl Holdings and Guidewire Software

Assuming the 90 days horizon Swvl Holdings Corp is expected to generate 4.19 times more return on investment than Guidewire Software. However, Swvl Holdings is 4.19 times more volatile than Guidewire Software. It trades about 0.07 of its potential returns per unit of risk. Guidewire Software is currently generating about 0.03 per unit of risk. If you would invest  1.45  in Swvl Holdings Corp on September 19, 2024 and sell it today you would earn a total of  0.24  from holding Swvl Holdings Corp or generate 16.55% return on investment over 90 days.

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

Swvl Holdings Corp  vs.  Guidewire Software

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.

Guidewire Software

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guidewire Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Guidewire Software is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Swvl Holdings and Guidewire Software

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

The idea behind Swvl Holdings Corp and Guidewire Software 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.