Correlation Between GAMCO Global and Ryanair Holdings

Can any of the company-specific risk be diversified away by investing in both GAMCO Global and Ryanair Holdings 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 GAMCO Global and Ryanair Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GAMCO Global Gold and Ryanair Holdings PLC, you can compare the effects of market volatilities on GAMCO Global and Ryanair Holdings 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 GAMCO Global with a short position of Ryanair Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Ryanair Holdings.

Diversification Opportunities for GAMCO Global and Ryanair Holdings

-0.14

Correlation Coefficient

GAMCO Global  Ryanair Holdings

Good diversification

The 3 months correlation between GAMCO and Ryanair is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Ryanair Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings PLC and GAMCO Global 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 GAMCO Global Gold are associated (or correlated) with Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings PLC has no effect on the direction of GAMCO Global i.e., GAMCO Global and Ryanair Holdings go up and down completely randomly.

Pair Corralation between GAMCO Global and Ryanair Holdings

Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Ryanair Holdings. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.55 times less risky than Ryanair Holdings. The preferred stock trades about -0.16 of its potential returns per unit of risk. The Ryanair Holdings PLC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,535  in Ryanair Holdings PLC on September 21, 2024 and sell it today you would lose (86.00) from holding Ryanair Holdings PLC or give up 1.9% of portfolio value over 90 days.

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

GAMCO Global Gold  vs.  Ryanair Holdings PLC

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GAMCO Global and Ryanair Holdings

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

The idea behind GAMCO Global Gold and Ryanair Holdings PLC 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 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..