Correlation Between Wag Group and Swvl Holdings

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

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

Diversification Opportunities for Wag Group and Swvl Holdings

-0.2

Correlation Coefficient

Wag Group  Swvl Holdings

Good diversification

The 3 months correlation between Wag and Swvl is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wag Group Co 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 Wag Group 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 Wag Group Co 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 Wag Group i.e., Wag Group and Swvl Holdings go up and down completely randomly.

Pair Corralation between Wag Group and Swvl Holdings

Considering the 90-day investment horizon Wag Group Co is expected to under-perform the Swvl Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Wag Group Co is 1.11 times less risky than Swvl Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Swvl Holdings Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1.59  in Swvl Holdings Corp on December 26, 2024 and sell it today you would lose (0.03) from holding Swvl Holdings Corp or give up 1.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Wag Group Co  vs.  Swvl Holdings Corp

Wag Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wag Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Swvl Holdings Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swvl Holdings Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Swvl Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wag Group and Swvl Holdings

The main advantage of trading using opposite Wag Group and Swvl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wag Group 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 Wag Group Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.