Correlation Between De Grey and Ryanair Holdings

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

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

Diversification Opportunities for De Grey and Ryanair Holdings

0.62

Correlation Coefficient

De Grey  Ryanair Holdings

Poor diversification

The 3 months correlation between DGD and Ryanair is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining 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 De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Ryanair Holdings go up and down completely randomly.

Pair Corralation between De Grey and Ryanair Holdings

Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.01 times more return on investment than Ryanair Holdings. However, De Grey is 1.01 times more volatile than Ryanair Holdings plc. It trades about 0.69 of its potential returns per unit of risk. Ryanair Holdings plc is currently generating about -0.19 per unit of risk. If you would invest  104.00  in De Grey Mining on October 22, 2024 and sell it today you would earn a total of  16.00  from holding De Grey Mining or generate 15.38% return on investment over 90 days.

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

De Grey Mining  vs.  Ryanair Holdings plc

De Grey Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ryanair Holdings plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Ryanair Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with De Grey and Ryanair Holdings

The main advantage of trading using opposite De Grey and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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 De Grey Mining 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.