Correlation Between Mesa Air and Figs
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Figs 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 Figs 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 Figs Inc, you can compare the effects of market volatilities on Mesa Air and Figs 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 Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Figs.
Diversification Opportunities for Mesa Air and Figs
Modest diversification
The 3 months correlation between Mesa and Figs is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Mesa Air i.e., Mesa Air and Figs go up and down completely randomly.
Pair Corralation between Mesa Air and Figs
Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Figs. In addition to that, Mesa Air is 1.28 times more volatile than Figs Inc. It trades about 0.0 of its total potential returns per unit of risk. Figs Inc is currently generating about 0.02 per unit of volatility. If you would invest 519.00 in Figs Inc on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Figs Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Figs Inc
Performance |
| Timeline |
| Mesa Air Group |
| Figs Inc |
Mesa Air and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Figs
The main advantage of trading using opposite Mesa Air and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| Mesa Air vs. Canadian Pacific Railway | Mesa Air vs. Werner Enterprises | Mesa Air vs. Canadian National Railway | Mesa Air vs. CSX Corporation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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