Correlation Between Ryanair Holdings and InterContinental
Can any of the company-specific risk be diversified away by investing in both Ryanair Holdings and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on Ryanair Holdings and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryanair Holdings and InterContinental.
Diversification Opportunities for Ryanair Holdings and InterContinental
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ryanair and InterContinental is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings plc and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and InterContinental go up and down completely randomly.
Pair Corralation between Ryanair Holdings and InterContinental
Assuming the 90 days trading horizon Ryanair Holdings plc is expected to generate 1.84 times more return on investment than InterContinental. However, Ryanair Holdings is 1.84 times more volatile than InterContinental Hotels Group. It trades about 0.11 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.08 per unit of risk. If you would invest 153,400 in Ryanair Holdings plc on September 24, 2024 and sell it today you would earn a total of 6,300 from holding Ryanair Holdings plc or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ryanair Holdings plc vs. InterContinental Hotels Group
Performance |
| Timeline |
| Ryanair Holdings plc |
| InterContinental Hotels |
Ryanair Holdings and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ryanair Holdings and InterContinental
The main advantage of trading using opposite Ryanair Holdings and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryanair Holdings position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Ryanair Holdings vs. Monster Beverage Corp | Ryanair Holdings vs. JD Sports Fashion | Ryanair Holdings vs. Applied Materials | Ryanair Holdings vs. Orient Telecoms |
| InterContinental vs. National Atomic Co | InterContinental vs. Flutter Entertainment PLC | InterContinental vs. Camellia Plc | InterContinental vs. Marwyn Value Investors |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |