Correlation Between Mesa Air and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Aspen Insurance 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 Mesa Air and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesa Air Group and Aspen Insurance Holdings, you can compare the effects of market volatilities on Mesa Air and Aspen Insurance 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 Mesa Air with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Aspen Insurance.
Diversification Opportunities for Mesa Air and Aspen Insurance
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mesa and Aspen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Aspen Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Insurance Holdings and Mesa Air 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 Mesa Air Group are associated (or correlated) with Aspen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Insurance Holdings has no effect on the direction of Mesa Air i.e., Mesa Air and Aspen Insurance go up and down completely randomly.
Pair Corralation between Mesa Air and Aspen Insurance
Given the investment horizon of 90 days Mesa Air Group is expected to generate 2.47 times more return on investment than Aspen Insurance. However, Mesa Air is 2.47 times more volatile than Aspen Insurance Holdings. It trades about 0.25 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.07 per unit of risk. If you would invest 91.00 in Mesa Air Group on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Mesa Air Group or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Mesa Air Group |
| Aspen Insurance Holdings |
Mesa Air and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Aspen Insurance
The main advantage of trading using opposite Mesa Air and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Aspen Insurance 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 Aspen Insurance will offset losses from the drop in Aspen Insurance's long position.| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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