Correlation Between Ryanair Holdings and NISOURCE

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

Diversification Opportunities for Ryanair Holdings and NISOURCE

-0.15

Correlation Coefficient

Ryanair Holdings  NISOURCE

Good diversification

The 3 months correlation between Ryanair and NISOURCE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and NISOURCE go up and down completely randomly.

Pair Corralation between Ryanair Holdings and NISOURCE

Assuming the 90 days horizon Ryanair Holdings PLC is expected to under-perform the NISOURCE. In addition to that, Ryanair Holdings is 1.75 times more volatile than NISOURCE FIN P. It trades about 0.0 of its total potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.25 per unit of volatility. If you would invest  10,348  in NISOURCE FIN P on September 23, 2024 and sell it today you would earn a total of  315.00  from holding NISOURCE FIN P or generate 3.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.58%
Values	Daily Returns

Ryanair Holdings PLC  vs.  NISOURCE FIN P

Ryanair Holdings PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryanair Holdings PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ryanair Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NISOURCE FIN P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISOURCE FIN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NISOURCE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ryanair Holdings and NISOURCE

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

The idea behind Ryanair Holdings PLC and NISOURCE FIN P 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..