Correlation Between Ryanair Holdings and Delek Logistics

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

Diversification Opportunities for Ryanair Holdings and Delek Logistics

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Ryanair and Delek is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ryanair Holdings PLC and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of Ryanair Holdings i.e., Ryanair Holdings and Delek Logistics go up and down completely randomly.

Pair Corralation between Ryanair Holdings and Delek Logistics

Assuming the 90 days horizon Ryanair Holdings PLC is expected to generate 0.52 times more return on investment than Delek Logistics. However, Ryanair Holdings PLC is 1.93 times less risky than Delek Logistics. It trades about 0.12 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about -0.16 per unit of risk. If you would invest  14,083  in Ryanair Holdings PLC on December 29, 2023 and sell it today you would earn a total of  519.00  from holding Ryanair Holdings PLC or generate 3.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ryanair Holdings PLC  vs.  Delek Logistics Partners

 Performance 
       Timeline  
Ryanair Holdings PLC 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ryanair Holdings PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ryanair Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Delek Logistics Partners 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Delek Logistics Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Delek Logistics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Ryanair Holdings and Delek Logistics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ryanair Holdings and Delek Logistics

The main advantage of trading using opposite Ryanair Holdings and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryanair Holdings position performs unexpectedly, Delek Logistics 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 Delek Logistics will offset losses from the drop in Delek Logistics' long position.
The idea behind Ryanair Holdings PLC and Delek Logistics Partners 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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