Correlation Between Ryanair Holdings and Canaf Investments

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

Diversification Opportunities for Ryanair Holdings and Canaf Investments

-0.77

Correlation Coefficient

Ryanair Holdings  Canaf Investments

Pay attention - limited upside

The 3 months correlation between Ryanair and Canaf is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments 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 Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Canaf Investments go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Canaf Investments

Assuming the 90 days horizon Ryanair Holdings PLC is expected to generate 1.67 times more return on investment than Canaf Investments. However, Ryanair Holdings is 1.67 times more volatile than Canaf Investments. It trades about 0.2 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.13 per unit of risk. If you would invest  5,083  in Ryanair Holdings PLC on May 7, 2025 and sell it today you would earn a total of  1,294  from holding Ryanair Holdings PLC or generate 25.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Ryanair Holdings PLC  vs.  Canaf Investments

Ryanair Holdings PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ryanair Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Canaf Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canaf Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ryanair Holdings and Canaf Investments

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

The idea behind Ryanair Holdings PLC and Canaf Investments 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.