Correlation Between MondayCom and Swvl Holdings

Can any of the company-specific risk be diversified away by investing in both MondayCom 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 MondayCom and Swvl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MondayCom and Swvl Holdings Corp, you can compare the effects of market volatilities on MondayCom 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 MondayCom with a short position of Swvl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MondayCom and Swvl Holdings.

Diversification Opportunities for MondayCom and Swvl Holdings

0.43

Correlation Coefficient

MondayCom  Swvl Holdings

Very weak diversification

The 3 months correlation between MondayCom and Swvl is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom 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 MondayCom 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 MondayCom 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 MondayCom i.e., MondayCom and Swvl Holdings go up and down completely randomly.

Pair Corralation between MondayCom and Swvl Holdings

Given the investment horizon of 90 days MondayCom is expected to under-perform the Swvl Holdings. But the stock apears to be less risky and, when comparing its historical volatility, MondayCom is 3.21 times less risky than Swvl Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Swvl Holdings Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1.80  in Swvl Holdings Corp on September 21, 2024 and sell it today you would lose (0.11) from holding Swvl Holdings Corp or give up 6.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.36%
Values	Daily Returns

MondayCom  vs.  Swvl Holdings Corp

MondayCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MondayCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Swvl Holdings Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swvl Holdings Corp are ranked lower than 4 (%) 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.

Pair Trading with MondayCom and Swvl Holdings

The main advantage of trading using opposite MondayCom and Swvl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MondayCom 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 MondayCom 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.