Correlation Between Ryanair Holdings and SBI Insurance

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

Diversification Opportunities for Ryanair Holdings and SBI Insurance

0.71

Correlation Coefficient

Ryanair Holdings  SBI Insurance

Poor diversification

The 3 months correlation between Ryanair and SBI is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and SBI Insurance go up and down completely randomly.

Pair Corralation between Ryanair Holdings and SBI Insurance

Assuming the 90 days trading horizon Ryanair Holdings plc is expected to under-perform the SBI Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Ryanair Holdings plc is 1.85 times less risky than SBI Insurance. The stock trades about -0.1 of its potential returns per unit of risk. The SBI Insurance Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  620.00  in SBI Insurance Group on October 6, 2024 and sell it today you would earn a total of  30.00  from holding SBI Insurance Group or generate 4.84% 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.  SBI Insurance Group

Ryanair Holdings plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings plc are ranked lower than 15 (%) 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.

SBI Insurance Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SBI Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ryanair Holdings and SBI Insurance

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

The idea behind Ryanair Holdings plc and SBI Insurance Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.