Correlation Between Beyond Meat and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Mesa Air 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 Beyond Meat and Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Mesa Air Group, you can compare the effects of market volatilities on Beyond Meat and Mesa Air 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 Beyond Meat with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Mesa Air.
Diversification Opportunities for Beyond Meat and Mesa Air
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beyond and Mesa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group and Beyond Meat 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 Beyond Meat are associated (or correlated) with Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Beyond Meat i.e., Beyond Meat and Mesa Air go up and down completely randomly.
Pair Corralation between Beyond Meat and Mesa Air
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Mesa Air. But the stock apears to be less risky and, when comparing its historical volatility, Beyond Meat is 1.34 times less risky than Mesa Air. The stock trades about -0.02 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Mesa Air Group on September 4, 2024 and sell it today you would lose (23.00) from holding Mesa Air Group or give up 18.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Mesa Air Group
Performance |
| Timeline |
| Beyond Meat |
| Mesa Air Group |
Beyond Meat and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Mesa Air
The main advantage of trading using opposite Beyond Meat and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air's long position.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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