Correlation Between Centessa Pharmaceuticals and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals 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 Centessa Pharmaceuticals and Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Mesa Air Group, you can compare the effects of market volatilities on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Mesa Air.
Diversification Opportunities for Centessa Pharmaceuticals and Mesa Air
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centessa and Mesa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC 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 Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC 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 Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Mesa Air go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Mesa Air
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 1.27 times more return on investment than Mesa Air. However, Centessa Pharmaceuticals is 1.27 times more volatile than Mesa Air Group. It trades about 0.26 of its potential returns per unit of risk. Mesa Air Group is currently generating about -0.12 per unit of risk. If you would invest 1,515 in Centessa Pharmaceuticals PLC on August 24, 2024 and sell it today you would earn a total of 304.00 from holding Centessa Pharmaceuticals PLC or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Mesa Air Group
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Mesa Air Group |
Centessa Pharmaceuticals and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Mesa Air
The main advantage of trading using opposite Centessa Pharmaceuticals and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals 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.The idea behind Centessa Pharmaceuticals PLC and Mesa Air Group 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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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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