Correlation Between Ryanair Holdings and EPAM Systems

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

Diversification Opportunities for Ryanair Holdings and EPAM Systems

-0.18

Correlation Coefficient

Ryanair Holdings  EPAM Systems

Good diversification

The 3 months correlation between Ryanair and EPAM is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and EPAM Systems go up and down completely randomly.

Pair Corralation between Ryanair Holdings and EPAM Systems

Assuming the 90 days horizon Ryanair Holdings PLC is expected to generate 0.76 times more return on investment than EPAM Systems. However, Ryanair Holdings PLC is 1.32 times less risky than EPAM Systems. It trades about 0.2 of its potential returns per unit of risk. EPAM Systems is currently generating about -0.01 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ryanair Holdings PLC  vs.  EPAM Systems

Ryanair Holdings PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings PLC are ranked lower than 15 (%) 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.

EPAM Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days EPAM Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EPAM Systems is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ryanair Holdings and EPAM Systems

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

The idea behind Ryanair Holdings PLC and EPAM Systems 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.