Correlation Between Multilaser Industrial and Ryanair Holdings

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

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

Diversification Opportunities for Multilaser Industrial and Ryanair Holdings

-0.75

Correlation Coefficient

Multilaser Industrial  Ryanair Holdings

Pay attention - limited upside

The 3 months correlation between Multilaser and Ryanair is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Multilaser Industrial SA 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 Multilaser Industrial 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 Multilaser Industrial SA 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 Multilaser Industrial i.e., Multilaser Industrial and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Multilaser Industrial and Ryanair Holdings

Assuming the 90 days trading horizon Multilaser Industrial SA is expected to under-perform the Ryanair Holdings. In addition to that, Multilaser Industrial is 7.36 times more volatile than Ryanair Holdings plc. It trades about -0.11 of its total potential returns per unit of risk. Ryanair Holdings plc is currently generating about -0.5 per unit of volatility. If you would invest  3,550  in Ryanair Holdings plc on October 8, 2024 and sell it today you would lose (196.00) from holding Ryanair Holdings plc or give up 5.52% of portfolio value over 90 days.

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

Multilaser Industrial SA  vs.  Ryanair Holdings plc

Multilaser Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multilaser Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ryanair Holdings plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ryanair Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multilaser Industrial and Ryanair Holdings

The main advantage of trading using opposite Multilaser Industrial and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multilaser Industrial 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 Multilaser Industrial SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.