How is the value of the RYCEY ADR tied to its underlying stock RR (LSE)

Question

I am curious how an ADR is tied to the value of its underlying stock, specifically with RYCEY.
I have a few closely related questions.
I am ignoring forex issues in the following. The exchange rate fluctuates, of course, but in the following the rate varied from about 0.742-0.750 during the day, so I am treating it as more or less constant.
(I'm not sure how to scale the graphs, excuse their size.)

The ADR ratio is listed as 1:1, however if I look up RYCEY and RR:LON there seems to be a 100:1 ratio. What am I missing?

I would expect that the ratio between RYCEY and RR:LON to be roughly 1:1 (or 100:1 as seems to be the case). However, there does not appear to be such a relationship below. What am I missing?

What mechanism is supposed to make the ADR track the underlying stock?

Flux · Answer

What mechanism is supposed to make the ADR track the underlying stock?

Arbitrage. It is possible to convert the ADR to the underlying, and to convert the underlying to the ADR. There are fees involved for depositing and withdrawing the underlying stock. There may also be some delay between the deposit/withdrawal request and the time the shares are received. These two reasons could explain why the ADR price does not precisely track the underlying stock's price.
You can get the details in the Deposit Agreement in the ADR's Form F-6 filing.

How is the value of the RYCEY ADR tied to its underlying stock RR (LSE)

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