Correlation Between Ryanair Holdings and Grupo Carso

Can any of the company-specific risk be diversified away by investing in both Ryanair Holdings and Grupo Carso 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 Grupo Carso 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 Grupo Carso SAB, you can compare the effects of market volatilities on Ryanair Holdings and Grupo Carso 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 Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryanair Holdings and Grupo Carso.

Diversification Opportunities for Ryanair Holdings and Grupo Carso

0.16

Correlation Coefficient

Ryanair Holdings  Grupo Carso

Average diversification

The 3 months correlation between Ryanair and Grupo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Grupo Carso go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Grupo Carso

Assuming the 90 days trading horizon Ryanair Holdings plc is expected to generate 0.94 times more return on investment than Grupo Carso. However, Ryanair Holdings plc is 1.06 times less risky than Grupo Carso. It trades about 0.11 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.01 per unit of risk. If you would invest  1,877  in Ryanair Holdings plc on December 22, 2024 and sell it today you would earn a total of  223.00  from holding Ryanair Holdings plc or generate 11.88% return on investment over 90 days.

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

Ryanair Holdings plc  vs.  Grupo Carso SAB

Ryanair Holdings plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Ryanair Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Grupo Carso SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grupo Carso is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ryanair Holdings and Grupo Carso

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

The idea behind Ryanair Holdings plc and Grupo Carso SAB 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.