Correlation Between Oakley Capital and Ryanair Holdings

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

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

Diversification Opportunities for Oakley Capital and Ryanair Holdings

-0.3

Correlation Coefficient

Oakley Capital  Ryanair Holdings

Very good diversification

The 3 months correlation between Oakley and Ryanair is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments 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 Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Ryanair Holdings go up and down completely randomly.

Pair Corralation between Oakley Capital and Ryanair Holdings

Assuming the 90 days trading horizon Oakley Capital is expected to generate 1.13 times less return on investment than Ryanair Holdings. But when comparing it to its historical volatility, Oakley Capital Investments is 2.2 times less risky than Ryanair Holdings. It trades about 0.03 of its potential returns per unit of risk. Ryanair Holdings plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  156,600  in Ryanair Holdings plc on October 5, 2024 and sell it today you would earn a total of  2,400  from holding Ryanair Holdings plc or generate 1.53% return on investment over 90 days.

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

Oakley Capital Investments  vs.  Ryanair Holdings plc

Oakley Capital Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oakley Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ryanair Holdings plc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady essential indicators, Ryanair Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oakley Capital and Ryanair Holdings

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