Correlation Between Swvl Holdings and CS Disco

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

Diversification Opportunities for Swvl Holdings and CS Disco

0.05

Correlation Coefficient

Swvl Holdings  CS Disco

Significant diversification

The 3 months correlation between Swvl and LAW is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and CS Disco LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS Disco LLC 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 CS Disco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS Disco LLC has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and CS Disco go up and down completely randomly.

Pair Corralation between Swvl Holdings and CS Disco

Assuming the 90 days horizon Swvl Holdings Corp is expected to generate 3.57 times more return on investment than CS Disco. However, Swvl Holdings is 3.57 times more volatile than CS Disco LLC. It trades about 0.01 of its potential returns per unit of risk. CS Disco LLC is currently generating about 0.0 per unit of risk. If you would invest  1.45  in Swvl Holdings Corp on September 19, 2024 and sell it today you would lose (0.14) from holding Swvl Holdings Corp or give up 9.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Swvl Holdings Corp  vs.  CS Disco LLC

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.

CS Disco LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CS Disco LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CS Disco 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 Swvl Holdings and CS Disco

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

The idea behind Swvl Holdings Corp and CS Disco LLC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.