Correlation Between Mesa Air and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Bassett Furniture 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 Bassett Furniture 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 Bassett Furniture Industries, you can compare the effects of market volatilities on Mesa Air and Bassett Furniture 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 Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Bassett Furniture.
Diversification Opportunities for Mesa Air and Bassett Furniture
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mesa and Bassett is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture 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 Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of Mesa Air i.e., Mesa Air and Bassett Furniture go up and down completely randomly.
Pair Corralation between Mesa Air and Bassett Furniture
Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Bassett Furniture. In addition to that, Mesa Air is 3.26 times more volatile than Bassett Furniture Industries. It trades about -0.01 of its total potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.06 per unit of volatility. If you would invest 1,376 in Bassett Furniture Industries on September 5, 2024 and sell it today you would earn a total of 154.00 from holding Bassett Furniture Industries or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Bassett Furniture Industries
Performance |
| Timeline |
| Mesa Air Group |
| Bassett Furniture |
Mesa Air and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Bassett Furniture
The main advantage of trading using opposite Mesa Air and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Bassett Furniture 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 Bassett Furniture will offset losses from the drop in Bassett Furniture'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 |
| Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Crown Crafts | Bassett Furniture vs. MasterBrand | Bassett Furniture vs. MillerKnoll |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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