Correlation Between Ryanair Holdings and Cardinal Health,

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

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

Diversification Opportunities for Ryanair Holdings and Cardinal Health,

0.63

Correlation Coefficient

Ryanair Holdings  Cardinal Health,

Poor diversification

The 3 months correlation between Ryanair and Cardinal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and Cardinal Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health, and Ryanair Holdings 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 Ryanair Holdings plc are associated (or correlated) with Cardinal Health,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health, has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Cardinal Health, go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Cardinal Health,

Assuming the 90 days trading horizon Ryanair Holdings is expected to generate 1.37 times less return on investment than Cardinal Health,. But when comparing it to its historical volatility, Ryanair Holdings plc is 1.13 times less risky than Cardinal Health,. It trades about 0.15 of its potential returns per unit of risk. Cardinal Health, is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  60,010  in Cardinal Health, on October 8, 2024 and sell it today you would earn a total of  11,490  from holding Cardinal Health, or generate 19.15% return on investment over 90 days.

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

Ryanair Holdings plc  vs.  Cardinal Health,

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.

Cardinal Health,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cardinal Health, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ryanair Holdings and Cardinal Health,

The main advantage of trading using opposite Ryanair Holdings and Cardinal Health, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryanair Holdings position performs unexpectedly, Cardinal Health, 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 Cardinal Health, will offset losses from the drop in Cardinal Health,'s long position.

The idea behind Ryanair Holdings plc and Cardinal Health, 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.