Correlation Between Mesa Air and Catalyst Bancorp
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Catalyst Bancorp 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 Catalyst Bancorp 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 Catalyst Bancorp, you can compare the effects of market volatilities on Mesa Air and Catalyst Bancorp 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 Catalyst Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Catalyst Bancorp.
Diversification Opportunities for Mesa Air and Catalyst Bancorp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mesa and Catalyst is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Catalyst Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Bancorp 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 Catalyst Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Bancorp has no effect on the direction of Mesa Air i.e., Mesa Air and Catalyst Bancorp go up and down completely randomly.
Pair Corralation between Mesa Air and Catalyst Bancorp
Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Catalyst Bancorp. In addition to that, Mesa Air is 14.24 times more volatile than Catalyst Bancorp. It trades about -0.18 of its total potential returns per unit of risk. Catalyst Bancorp is currently generating about 0.0 per unit of volatility. If you would invest 1,168 in Catalyst Bancorp on December 9, 2024 and sell it today you would earn a total of 0.00 from holding Catalyst Bancorp or generate 0.0% 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. Catalyst Bancorp
Performance |
| Timeline |
| Mesa Air Group |
| Catalyst Bancorp |
Mesa Air and Catalyst Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Catalyst Bancorp
The main advantage of trading using opposite Mesa Air and Catalyst Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Catalyst Bancorp 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 Catalyst Bancorp will offset losses from the drop in Catalyst Bancorp's long position.| Mesa Air vs. Allegiant Travel | ||
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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