Correlation Between Ryanair Holdings and Hafnia
Can any of the company-specific risk be diversified away by investing in both Ryanair Holdings and Hafnia 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 Hafnia 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 Hafnia Limited, you can compare the effects of market volatilities on Ryanair Holdings and Hafnia 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 Hafnia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ryanair Holdings and Hafnia.
Diversification Opportunities for Ryanair Holdings and Hafnia
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ryanair and Hafnia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and Hafnia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hafnia Limited 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 Hafnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hafnia Limited has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Hafnia go up and down completely randomly.
Pair Corralation between Ryanair Holdings and Hafnia
Assuming the 90 days horizon Ryanair Holdings PLC is expected to generate 0.84 times more return on investment than Hafnia. However, Ryanair Holdings PLC is 1.19 times less risky than Hafnia. It trades about -0.04 of its potential returns per unit of risk. Hafnia Limited is currently generating about -0.05 per unit of risk. If you would invest 4,488 in Ryanair Holdings PLC on August 31, 2024 and sell it today you would lose (102.00) from holding Ryanair Holdings PLC or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ryanair Holdings PLC vs. Hafnia Limited
Performance |
| Timeline |
| Ryanair Holdings PLC |
| Hafnia Limited |
Ryanair Holdings and Hafnia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ryanair Holdings and Hafnia
The main advantage of trading using opposite Ryanair Holdings and Hafnia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryanair Holdings position performs unexpectedly, Hafnia 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 Hafnia will offset losses from the drop in Hafnia's long position.| Ryanair Holdings vs. Allegiant Travel | Ryanair Holdings vs. Azul SA | Ryanair Holdings vs. Alaska Air Group | Ryanair Holdings vs. International Consolidated Airlines |
| Hafnia vs. Comstock Holding Companies | Hafnia vs. SEI Investments | Hafnia vs. Chester Mining | Hafnia vs. Link Real Estate |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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