Correlation Between Swvl Holdings and Alkami Technology

Can any of the company-specific risk be diversified away by investing in both Swvl Holdings and Alkami Technology 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 Alkami Technology 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 Alkami Technology, you can compare the effects of market volatilities on Swvl Holdings and Alkami Technology 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 Alkami Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swvl Holdings and Alkami Technology.

Diversification Opportunities for Swvl Holdings and Alkami Technology

0.23

Correlation Coefficient

Swvl Holdings  Alkami Technology

Modest diversification

The 3 months correlation between Swvl and Alkami is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Swvl Holdings Corp and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology 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 Alkami Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkami Technology has no effect on the direction of Swvl Holdings i.e., Swvl Holdings and Alkami Technology go up and down completely randomly.

Pair Corralation between Swvl Holdings and Alkami Technology

Assuming the 90 days horizon Swvl Holdings Corp is expected to under-perform the Alkami Technology. In addition to that, Swvl Holdings is 5.05 times more volatile than Alkami Technology. It trades about -0.02 of its total potential returns per unit of risk. Alkami Technology is currently generating about -0.04 per unit of volatility. If you would invest  3,947  in Alkami Technology on September 30, 2024 and sell it today you would lose (94.00) from holding Alkami Technology or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Swvl Holdings Corp  vs.  Alkami Technology

Swvl Holdings Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swvl Holdings Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Swvl Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alkami Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkami Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, Alkami Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swvl Holdings and Alkami Technology

The main advantage of trading using opposite Swvl Holdings and Alkami Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swvl Holdings position performs unexpectedly, Alkami Technology 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 Alkami Technology will offset losses from the drop in Alkami Technology's long position.

The idea behind Swvl Holdings Corp and Alkami Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.