Correlation Between RYANAIR HLDGS and PUMA SE

Can any of the company-specific risk be diversified away by investing in both RYANAIR HLDGS and PUMA SE 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 HLDGS and PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RYANAIR HLDGS ADR and PUMA SE, you can compare the effects of market volatilities on RYANAIR HLDGS and PUMA SE 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 HLDGS with a short position of PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of RYANAIR HLDGS and PUMA SE.

Diversification Opportunities for RYANAIR HLDGS and PUMA SE

-0.03

Correlation Coefficient

RYANAIR HLDGS  PUMA SE

Good diversification

The 3 months correlation between RYANAIR and PUMA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding RYANAIR HLDGS ADR and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE and RYANAIR HLDGS 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 HLDGS ADR are associated (or correlated) with PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of RYANAIR HLDGS i.e., RYANAIR HLDGS and PUMA SE go up and down completely randomly.

Pair Corralation between RYANAIR HLDGS and PUMA SE

Assuming the 90 days trading horizon RYANAIR HLDGS ADR is expected to under-perform the PUMA SE. But the stock apears to be less risky and, when comparing its historical volatility, RYANAIR HLDGS ADR is 1.58 times less risky than PUMA SE. The stock trades about -0.02 of its potential returns per unit of risk. The PUMA SE is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,257  in PUMA SE on October 6, 2024 and sell it today you would earn a total of  117.00  from holding PUMA SE or generate 2.75% return on investment over 90 days.

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

RYANAIR HLDGS ADR  vs.  PUMA SE

RYANAIR HLDGS ADR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RYANAIR HLDGS ADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, RYANAIR HLDGS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PUMA SE

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PUMA SE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PUMA SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RYANAIR HLDGS and PUMA SE

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

The idea behind RYANAIR HLDGS ADR and PUMA SE 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.