Correlation Between Mesa Air and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Mesa Air and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing, you can compare the effects of market volatilities on Mesa Air and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and AMCON Distributing.
Diversification Opportunities for Mesa Air and AMCON Distributing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesa and AMCON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Mesa Air i.e., Mesa Air and AMCON Distributing go up and down completely randomly.
Pair Corralation between Mesa Air and AMCON Distributing
Given the investment horizon of 90 days Mesa Air Group is expected to generate 0.99 times more return on investment than AMCON Distributing. However, Mesa Air Group is 1.01 times less risky than AMCON Distributing. It trades about 0.16 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.14 per unit of risk. If you would invest 94.00 in Mesa Air Group on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Mesa Air Group or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. AMCON Distributing
Performance |
| Timeline |
| Mesa Air Group |
| AMCON Distributing |
Mesa Air and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and AMCON Distributing
The main advantage of trading using opposite Mesa Air and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing'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 |
| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Wolverine World Wide |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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