Correlation Between Ryman Healthcare and AIB Group

Can any of the company-specific risk be diversified away by investing in both Ryman Healthcare and AIB Group 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 Ryman Healthcare and AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ryman Healthcare Limited and AIB Group plc, you can compare the effects of market volatilities on Ryman Healthcare and AIB Group 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 Ryman Healthcare with a short position of AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryman Healthcare and AIB Group.

Diversification Opportunities for Ryman Healthcare and AIB Group

-0.88

Correlation Coefficient

Ryman Healthcare  AIB Group

Pay attention - limited upside

The 3 months correlation between Ryman and AIB is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Healthcare Limited and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc and Ryman Healthcare 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 Ryman Healthcare Limited are associated (or correlated) with AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of Ryman Healthcare i.e., Ryman Healthcare and AIB Group go up and down completely randomly.

Pair Corralation between Ryman Healthcare and AIB Group

Assuming the 90 days horizon Ryman Healthcare Limited is expected to under-perform the AIB Group. In addition to that, Ryman Healthcare is 1.7 times more volatile than AIB Group plc. It trades about -0.14 of its total potential returns per unit of risk. AIB Group plc is currently generating about 0.18 per unit of volatility. If you would invest  507.00  in AIB Group plc on December 20, 2024 and sell it today you would earn a total of  160.00  from holding AIB Group plc or generate 31.56% return on investment over 90 days.

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

Ryman Healthcare Limited  vs.  AIB Group plc

Ryman Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryman Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AIB Group plc

Risk-Adjusted Performance

Good

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

Pair Trading with Ryman Healthcare and AIB Group

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

The idea behind Ryman Healthcare Limited and AIB Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.