Correlation Between Ryanair Holdings and Acco Brands

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

Diversification Opportunities for Ryanair Holdings and Acco Brands

0.25

Correlation Coefficient

Ryanair Holdings  Acco Brands

Modest diversification

The 3 months correlation between Ryanair and Acco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands 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 Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Acco Brands go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Acco Brands

Assuming the 90 days horizon Ryanair Holdings PLC is expected to generate 0.72 times more return on investment than Acco Brands. However, Ryanair Holdings PLC is 1.39 times less risky than Acco Brands. It trades about 0.04 of its potential returns per unit of risk. Acco Brands is currently generating about -0.07 per unit of risk. If you would invest  4,394  in Ryanair Holdings PLC on September 21, 2024 and sell it today you would earn a total of  55.00  from holding Ryanair Holdings PLC or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ryanair Holdings PLC  vs.  Acco Brands

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.

Acco Brands

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Acco Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ryanair Holdings and Acco Brands

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

The idea behind Ryanair Holdings PLC and Acco Brands 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.