Correlation Between Ryanair Holdings and Transgene

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

Diversification Opportunities for Ryanair Holdings and Transgene

0.0

Correlation Coefficient

Ryanair Holdings  Transgene

Pay attention - limited upside

The 3 months correlation between Ryanair and Transgene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and Transgene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transgene SA 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 Transgene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transgene SA has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Transgene go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Transgene

Assuming the 90 days horizon Ryanair Holdings is expected to generate 21.92 times less return on investment than Transgene. But when comparing it to its historical volatility, Ryanair Holdings PLC is 22.46 times less risky than Transgene. It trades about 0.05 of its potential returns per unit of risk. Transgene SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Transgene SA on December 2, 2024 and sell it today you would earn a total of  158.00  from holding Transgene SA or generate 15800.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Ryanair Holdings PLC  vs.  Transgene SA

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 fairly uncertain basic indicators, Ryanair Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Transgene SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ryanair Holdings and Transgene

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

The idea behind Ryanair Holdings PLC and Transgene SA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.