Correlation Between Grupo Carso and Ryanair Holdings

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

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

Diversification Opportunities for Grupo Carso and Ryanair Holdings

0.16

Correlation Coefficient

Grupo Carso  Ryanair Holdings

Average diversification

The 3 months correlation between Grupo and Ryanair is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Ryanair Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings plc and Grupo Carso 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 Grupo Carso SAB are associated (or correlated) with Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings plc has no effect on the direction of Grupo Carso i.e., Grupo Carso and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Grupo Carso and Ryanair Holdings

Assuming the 90 days horizon Grupo Carso is expected to generate 10.78 times less return on investment than Ryanair Holdings. In addition to that, Grupo Carso is 1.06 times more volatile than Ryanair Holdings plc. It trades about 0.01 of its total potential returns per unit of risk. Ryanair Holdings plc is currently generating about 0.11 per unit of volatility. If you would invest  1,877  in Ryanair Holdings plc on December 22, 2024 and sell it today you would earn a total of  223.00  from holding Ryanair Holdings plc or generate 11.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grupo Carso SAB  vs.  Ryanair Holdings plc

Grupo Carso SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ryanair Holdings plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Ryanair Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and Ryanair Holdings

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

The idea behind Grupo Carso SAB and Ryanair Holdings plc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.