Correlation Between Mesa Air and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Mesa Air and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Centessa Pharmaceuticals.
Diversification Opportunities for Mesa Air and Centessa Pharmaceuticals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mesa and Centessa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Mesa Air i.e., Mesa Air and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Mesa Air and Centessa Pharmaceuticals
Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Centessa Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Mesa Air Group is 1.27 times less risky than Centessa Pharmaceuticals. The stock trades about -0.12 of its potential returns per unit of risk. The Centessa Pharmaceuticals PLC is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,515 in Centessa Pharmaceuticals PLC on August 24, 2024 and sell it today you would earn a total of 304.00 from holding Centessa Pharmaceuticals PLC or generate 20.07% 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. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Mesa Air Group |
| Centessa Pharmaceuticals |
Mesa Air and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Centessa Pharmaceuticals
The main advantage of trading using opposite Mesa Air and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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