Correlation Between Ford and Swvl Holdings
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Swvl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Swvl Holdings Corp, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Swvl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Swvl Holdings.
Diversification Opportunities for Ford and Swvl Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Swvl is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and Swvl Holdings go up and down completely randomly.
Pair Corralation between Ford and Swvl Holdings
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.31 times more return on investment than Swvl Holdings. However, Ford Motor is 3.18 times less risky than Swvl Holdings. It trades about 0.0 of its potential returns per unit of risk. Swvl Holdings Corp is currently generating about -0.03 per unit of risk. If you would invest 1,166 in Ford Motor on August 28, 2024 and sell it today you would lose (56.00) from holding Ford Motor or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Swvl Holdings Corp
Performance |
| Timeline |
| Ford Motor |
| Swvl Holdings Corp |
Ford and Swvl Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Swvl Holdings
The main advantage of trading using opposite Ford and Swvl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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.| Swvl Holdings vs. OLB Group | Swvl Holdings vs. Friendable | Swvl Holdings vs. Enfusion | Swvl Holdings vs. eGain |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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