Correlation Between Swvl Holdings and NextPlat Corp
Can any of the company-specific risk be diversified away by investing in both Swvl Holdings and NextPlat Corp 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 NextPlat Corp 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 NextPlat Corp, you can compare the effects of market volatilities on Swvl Holdings and NextPlat Corp 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 NextPlat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swvl Holdings and NextPlat Corp.
Diversification Opportunities for Swvl Holdings and NextPlat Corp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Swvl and NextPlat is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp 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 NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and NextPlat Corp go up and down completely randomly.
Pair Corralation between Swvl Holdings and NextPlat Corp
Assuming the 90 days horizon Swvl Holdings is expected to generate 2.7 times less return on investment than NextPlat Corp. But when comparing it to its historical volatility, Swvl Holdings Corp is 1.82 times less risky than NextPlat Corp. It trades about 0.06 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 62.00 in NextPlat Corp on December 11, 2024 and sell it today you would lose (41.00) from holding NextPlat Corp or give up 66.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.59% |
| Values | Daily Returns |
Swvl Holdings Corp vs. NextPlat Corp
Performance |
| Timeline |
| Swvl Holdings Corp |
| NextPlat Corp |
Swvl Holdings and NextPlat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swvl Holdings and NextPlat Corp
The main advantage of trading using opposite Swvl Holdings and NextPlat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swvl Holdings position performs unexpectedly, NextPlat Corp 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 NextPlat Corp will offset losses from the drop in NextPlat Corp's long position.The idea behind Swvl Holdings Corp and NextPlat 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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