Correlation Between Mesa Air and Big Tree
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Big Tree 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 Big Tree 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 Big Tree Cloud, you can compare the effects of market volatilities on Mesa Air and Big Tree 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 Big Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Big Tree.
Diversification Opportunities for Mesa Air and Big Tree
Average diversification
The 3 months correlation between Mesa and Big is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Big Tree Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Tree Cloud 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 Big Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Tree Cloud has no effect on the direction of Mesa Air i.e., Mesa Air and Big Tree go up and down completely randomly.
Pair Corralation between Mesa Air and Big Tree
Given the investment horizon of 90 days Mesa Air Group is expected to generate 0.29 times more return on investment than Big Tree. However, Mesa Air Group is 3.41 times less risky than Big Tree. It trades about 0.24 of its potential returns per unit of risk. Big Tree Cloud is currently generating about 0.05 per unit of risk. If you would invest 88.00 in Mesa Air Group on September 14, 2024 and sell it today you would earn a total of 18.00 from holding Mesa Air Group or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Big Tree Cloud
Performance |
| Timeline |
| Mesa Air Group |
| Big Tree Cloud |
Mesa Air and Big Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Big Tree
The main advantage of trading using opposite Mesa Air and Big Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Big Tree 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 Big Tree will offset losses from the drop in Big Tree's long position.| Mesa Air vs. American Airlines Group | Mesa Air vs. Southwest Airlines | Mesa Air vs. United Airlines Holdings | Mesa Air vs. Frontier Group Holdings |
| Big Tree vs. Pinterest | Big Tree vs. Mesa Air Group | Big Tree vs. Alaska Air Group | Big Tree vs. Getty Images Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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