Correlation Between Sprout Social and Swvl Holdings

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Can any of the company-specific risk be diversified away by investing in both Sprout Social 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 Sprout Social and Swvl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprout Social and Swvl Holdings Corp, you can compare the effects of market volatilities on Sprout Social 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 Sprout Social with a short position of Swvl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprout Social and Swvl Holdings.

Diversification Opportunities for Sprout Social and Swvl Holdings

SproutSwvlDiversified AwaySproutSwvlDiversified Away100%
-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sprout and Swvl is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sprout Social 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 Sprout Social 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 Sprout Social 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 Sprout Social i.e., Sprout Social and Swvl Holdings go up and down completely randomly.

Pair Corralation between Sprout Social and Swvl Holdings

Considering the 90-day investment horizon Sprout Social is expected to generate 0.24 times more return on investment than Swvl Holdings. However, Sprout Social is 4.19 times less risky than Swvl Holdings. It trades about 0.03 of its potential returns per unit of risk. Swvl Holdings Corp is currently generating about 0.0 per unit of risk. If you would invest  3,210  in Sprout Social on September 23, 2024 and sell it today you would earn a total of  35.00  from holding Sprout Social or generate 1.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.48%
ValuesDaily Returns

Sprout Social  vs.  Swvl Holdings Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15SPT SWVLW
       Timeline  
Sprout Social 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Sprout Social are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Sprout Social unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec262830323436
Swvl Holdings Corp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.0120.0140.0160.0180.020.0220.0240.026

Sprout Social and Swvl Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.89-7.41-4.92-2.440.04142.485.057.6210.1912.76 0.0050.0100.0150.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15SPT SWVLW
       Returns  

Pair Trading with Sprout Social and Swvl Holdings

The main advantage of trading using opposite Sprout Social and Swvl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprout Social 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 Sprout Social 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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