Correlation Between Juniata Valley and Ryanair Holdings

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

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

Diversification Opportunities for Juniata Valley and Ryanair Holdings

0.21

Correlation Coefficient

Juniata Valley  Ryanair Holdings

Modest diversification

The 3 months correlation between Juniata and Ryanair is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial 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 Juniata Valley 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 Juniata Valley Financial 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 Juniata Valley i.e., Juniata Valley and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Juniata Valley and Ryanair Holdings

Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 1.18 times more return on investment than Ryanair Holdings. However, Juniata Valley is 1.18 times more volatile than Ryanair Holdings PLC. It trades about 0.13 of its potential returns per unit of risk. Ryanair Holdings PLC is currently generating about -0.01 per unit of risk. If you would invest  1,130  in Juniata Valley Financial on September 20, 2024 and sell it today you would earn a total of  205.00  from holding Juniata Valley Financial or generate 18.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Juniata Valley Financial  vs.  Ryanair Holdings PLC

Juniata Valley Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Ryanair Holdings PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryanair Holdings PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ryanair Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Juniata Valley and Ryanair Holdings

The main advantage of trading using opposite Juniata Valley and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley 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 Juniata Valley Financial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.