Correlation Between Swvl Holdings and Otonomo Technologies
Can any of the company-specific risk be diversified away by investing in both Swvl Holdings and Otonomo Technologies 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 Otonomo Technologies 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 Otonomo Technologies, you can compare the effects of market volatilities on Swvl Holdings and Otonomo Technologies 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 Otonomo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swvl Holdings and Otonomo Technologies.
Diversification Opportunities for Swvl Holdings and Otonomo Technologies
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swvl and Otonomo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and Otonomo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otonomo Technologies 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 Otonomo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otonomo Technologies has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and Otonomo Technologies go up and down completely randomly.
Pair Corralation between Swvl Holdings and Otonomo Technologies
Assuming the 90 days horizon Swvl Holdings is expected to generate 1.51 times less return on investment than Otonomo Technologies. In addition to that, Swvl Holdings is 1.51 times more volatile than Otonomo Technologies. It trades about 0.07 of its total potential returns per unit of risk. Otonomo Technologies is currently generating about 0.16 per unit of volatility. If you would invest 2.00 in Otonomo Technologies on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Otonomo Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.99% |
| Values | Daily Returns |
Swvl Holdings Corp vs. Otonomo Technologies
Performance |
| Timeline |
| Swvl Holdings Corp |
| Otonomo Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Swvl Holdings and Otonomo Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swvl Holdings and Otonomo Technologies
The main advantage of trading using opposite Swvl Holdings and Otonomo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swvl Holdings position performs unexpectedly, Otonomo Technologies 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 Otonomo Technologies will offset losses from the drop in Otonomo Technologies' long position.The idea behind Swvl Holdings Corp and Otonomo Technologies 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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