Correlation Between REVO INSURANCE and Ryanair Holdings

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

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

Diversification Opportunities for REVO INSURANCE and Ryanair Holdings

0.48

Correlation Coefficient

REVO INSURANCE  Ryanair Holdings

Very weak diversification

The 3 months correlation between REVO and Ryanair is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Ryanair Holdings go up and down completely randomly.

Pair Corralation between REVO INSURANCE and Ryanair Holdings

Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.16 times less return on investment than Ryanair Holdings. But when comparing it to its historical volatility, REVO INSURANCE SPA is 1.24 times less risky than Ryanair Holdings. It trades about 0.05 of its potential returns per unit of risk. Ryanair Holdings plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,429  in Ryanair Holdings plc on December 2, 2024 and sell it today you would earn a total of  661.00  from holding Ryanair Holdings plc or generate 46.26% return on investment over 90 days.

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

REVO INSURANCE SPA  vs.  Ryanair Holdings plc

REVO INSURANCE SPA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Ryanair Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REVO INSURANCE and Ryanair Holdings

The main advantage of trading using opposite REVO INSURANCE and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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 REVO INSURANCE SPA 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.