Correlation Between Mesa Air and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Mesa Air and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Capital Clean.
Diversification Opportunities for Mesa Air and Capital Clean
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesa and Capital is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Mesa Air i.e., Mesa Air and Capital Clean go up and down completely randomly.
Pair Corralation between Mesa Air and Capital Clean
Given the investment horizon of 90 days Mesa Air Group is expected to generate 2.99 times more return on investment than Capital Clean. However, Mesa Air is 2.99 times more volatile than Capital Clean Energy. It trades about 0.26 of its potential returns per unit of risk. Capital Clean Energy is currently generating about -0.02 per unit of risk. If you would invest 88.00 in Mesa Air Group on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Mesa Air Group or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Capital Clean Energy
Performance |
| Timeline |
| Mesa Air Group |
| Capital Clean Energy |
Mesa Air and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Capital Clean
The main advantage of trading using opposite Mesa Air and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean'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 |
| Capital Clean vs. Electrovaya Common Shares | Capital Clean vs. Zoom Video Communications | Capital Clean vs. Videolocity International | Capital Clean vs. Hurco Companies |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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