Correlation Between Mesa Air and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Cumulus Media 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 Cumulus Media 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 Cumulus Media Class, you can compare the effects of market volatilities on Mesa Air and Cumulus Media 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 Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Cumulus Media.
Diversification Opportunities for Mesa Air and Cumulus Media
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mesa and Cumulus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Mesa Air i.e., Mesa Air and Cumulus Media go up and down completely randomly.
Pair Corralation between Mesa Air and Cumulus Media
Given the investment horizon of 90 days Mesa Air Group is expected to generate 1.18 times more return on investment than Cumulus Media. However, Mesa Air is 1.18 times more volatile than Cumulus Media Class. It trades about 0.0 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.15 per unit of risk. If you would invest 136.00 in Mesa Air Group on September 1, 2024 and sell it today you would lose (28.00) from holding Mesa Air Group or give up 20.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Cumulus Media Class
Performance |
| Timeline |
| Mesa Air Group |
| Cumulus Media Class |
Mesa Air and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Cumulus Media
The main advantage of trading using opposite Mesa Air and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media's long position.| Mesa Air vs. Canadian Pacific Railway | Mesa Air vs. Werner Enterprises | Mesa Air vs. Canadian National Railway | Mesa Air vs. CSX Corporation |
| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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