Correlation Between Ryanair Holdings and ANTA Sports

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

Diversification Opportunities for Ryanair Holdings and ANTA Sports

-0.26

Correlation Coefficient

Ryanair Holdings  ANTA Sports

Very good diversification

The 3 months correlation between Ryanair and ANTA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and ANTA Sports go up and down completely randomly.

Pair Corralation between Ryanair Holdings and ANTA Sports

Assuming the 90 days horizon Ryanair Holdings is expected to generate 10.63 times less return on investment than ANTA Sports. But when comparing it to its historical volatility, Ryanair Holdings PLC is 1.99 times less risky than ANTA Sports. It trades about 0.01 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  25,100  in ANTA Sports Products on September 29, 2024 and sell it today you would earn a total of  629.00  from holding ANTA Sports Products or generate 2.51% return on investment over 90 days.

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

Ryanair Holdings PLC  vs.  ANTA Sports Products

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.

ANTA Sports Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ryanair Holdings and ANTA Sports

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

The idea behind Ryanair Holdings PLC and ANTA Sports Products 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.