Correlation Between Ryanair Holdings and Apple

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

Diversification Opportunities for Ryanair Holdings and Apple

0.78

Correlation Coefficient

Ryanair Holdings  Apple

Poor diversification

The 3 months correlation between Ryanair and Apple is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Apple go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Apple

Assuming the 90 days trading horizon Ryanair Holdings is expected to generate 9.7 times less return on investment than Apple. In addition to that, Ryanair Holdings is 1.4 times more volatile than Apple Inc. It trades about 0.01 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.11 per unit of volatility. If you would invest  17,521  in Apple Inc on October 2, 2024 and sell it today you would earn a total of  6,854  from holding Apple Inc or generate 39.12% 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.  Apple Inc

Ryanair Holdings plc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Ryanair Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ryanair Holdings and Apple

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

The idea behind Ryanair Holdings plc and Apple Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.