Correlation Between Mesa Air and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both Mesa Air and FTAI Aviation 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 FTAI Aviation 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 FTAI Aviation Ltd, you can compare the effects of market volatilities on Mesa Air and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and FTAI Aviation.
Diversification Opportunities for Mesa Air and FTAI Aviation
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mesa and FTAI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of Mesa Air i.e., Mesa Air and FTAI Aviation go up and down completely randomly.
Pair Corralation between Mesa Air and FTAI Aviation
Given the investment horizon of 90 days Mesa Air Group is expected to generate 5.15 times more return on investment than FTAI Aviation. However, Mesa Air is 5.15 times more volatile than FTAI Aviation Ltd. It trades about 0.03 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.06 per unit of risk. If you would invest 129.00 in Mesa Air Group on September 2, 2024 and sell it today you would lose (21.00) from holding Mesa Air Group or give up 16.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.1% |
| Values | Daily Returns |
Mesa Air Group vs. FTAI Aviation Ltd
Performance |
| Timeline |
| Mesa Air Group |
| FTAI Aviation |
Mesa Air and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and FTAI Aviation
The main advantage of trading using opposite Mesa Air and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation'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 |
| FTAI Aviation vs. SunOpta | FTAI Aviation vs. Grocery Outlet Holding | FTAI Aviation vs. SNDL Inc | FTAI Aviation vs. NH Foods Ltd |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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