Correlation Between Mesa Air and BTS Group
Can any of the company-specific risk be diversified away by investing in both Mesa Air and BTS Group 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 BTS Group 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 BTS Group Holdings, you can compare the effects of market volatilities on Mesa Air and BTS Group 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 BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and BTS Group.
Diversification Opportunities for Mesa Air and BTS Group
Pay attention - limited upside
The 3 months correlation between Mesa and BTS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and BTS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group 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 BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group Holdings has no effect on the direction of Mesa Air i.e., Mesa Air and BTS Group go up and down completely randomly.
Pair Corralation between Mesa Air and BTS Group
Given the investment horizon of 90 days Mesa Air Group is expected to generate 4.77 times more return on investment than BTS Group. However, Mesa Air is 4.77 times more volatile than BTS Group Holdings. It trades about 0.03 of its potential returns per unit of risk. BTS Group Holdings is currently generating about -0.01 per unit of risk. If you would invest 111.00 in Mesa Air Group on September 13, 2024 and sell it today you would lose (6.00) from holding Mesa Air Group or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. BTS Group Holdings
Performance |
| Timeline |
| Mesa Air Group |
| BTS Group Holdings |
Mesa Air and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and BTS Group
The main advantage of trading using opposite Mesa Air and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, BTS Group 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 BTS Group will offset losses from the drop in BTS Group'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 |
| BTS Group vs. Broadstone Net Lease | BTS Group vs. HE Equipment Services | BTS Group vs. United Airlines Holdings | BTS Group vs. Mesa Air Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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