Correlation Between Ryanair Holdings and ATMOS

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

Diversification Opportunities for Ryanair Holdings and ATMOS

0.32

Correlation Coefficient

Ryanair Holdings  ATMOS

Weak diversification

The 3 months correlation between Ryanair and ATMOS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and ATMOS ENERGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMOS ENERGY 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 ATMOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMOS ENERGY P has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and ATMOS go up and down completely randomly.

Pair Corralation between Ryanair Holdings and ATMOS

Assuming the 90 days horizon Ryanair Holdings is expected to generate 4.18 times less return on investment than ATMOS. In addition to that, Ryanair Holdings is 1.59 times more volatile than ATMOS ENERGY P. It trades about 0.04 of its total potential returns per unit of risk. ATMOS ENERGY P is currently generating about 0.28 per unit of volatility. If you would invest  8,461  in ATMOS ENERGY P on September 21, 2024 and sell it today you would earn a total of  366.00  from holding ATMOS ENERGY P or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	66.67%
Values	Daily Returns

Ryanair Holdings PLC  vs.  ATMOS ENERGY 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 newest stock price disturbance, may contribute to short-term losses for the investors.

ATMOS ENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ryanair Holdings and ATMOS

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

The idea behind Ryanair Holdings PLC and ATMOS ENERGY 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.

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 CEOs Directory module to screen CEOs from public companies around the world.