Correlation Between Ryanair Holdings and General Motors
Can any of the company-specific risk be diversified away by investing in both Ryanair Holdings and General Motors 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 General Motors 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 General Motors Co, you can compare the effects of market volatilities on Ryanair Holdings and General Motors 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 General Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryanair Holdings and General Motors.
Diversification Opportunities for Ryanair Holdings and General Motors
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ryanair and General is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and General Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors 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 General Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and General Motors go up and down completely randomly.
Pair Corralation between Ryanair Holdings and General Motors
Assuming the 90 days trading horizon Ryanair Holdings is expected to generate 15.43 times less return on investment than General Motors. In addition to that, Ryanair Holdings is 1.1 times more volatile than General Motors Co. It trades about 0.01 of its total potential returns per unit of risk. General Motors Co is currently generating about 0.09 per unit of volatility. If you would invest 3,550 in General Motors Co on September 14, 2024 and sell it today you would earn a total of 1,670 from holding General Motors Co or generate 47.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.4% |
| Values | Daily Returns |
Ryanair Holdings plc vs. General Motors Co
Performance |
| Timeline |
| Ryanair Holdings plc |
| General Motors |
Ryanair Holdings and General Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ryanair Holdings and General Motors
The main advantage of trading using opposite Ryanair Holdings and General Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryanair Holdings position performs unexpectedly, General Motors 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 General Motors will offset losses from the drop in General Motors' long position.| Ryanair Holdings vs. Catena Media PLC | Ryanair Holdings vs. Intermediate Capital Group | Ryanair Holdings vs. LBG Media PLC | Ryanair Holdings vs. Ally Financial |
| General Motors vs. Ryanair Holdings plc | General Motors vs. Delta Air Lines | General Motors vs. United Utilities Group | General Motors vs. Jacquet Metal Service |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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