Correlation Between Mesa Air and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Barrick Gold 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 Barrick Gold 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 Barrick Gold Corp, you can compare the effects of market volatilities on Mesa Air and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Barrick Gold.
Diversification Opportunities for Mesa Air and Barrick Gold
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesa and Barrick is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Mesa Air i.e., Mesa Air and Barrick Gold go up and down completely randomly.
Pair Corralation between Mesa Air and Barrick Gold
Given the investment horizon of 90 days Mesa Air Group is expected to generate 3.32 times more return on investment than Barrick Gold. However, Mesa Air is 3.32 times more volatile than Barrick Gold Corp. It trades about 0.02 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 146.00 in Mesa Air Group on August 30, 2024 and sell it today you would lose (34.00) from holding Mesa Air Group or give up 23.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Barrick Gold Corp
Performance |
| Timeline |
| Mesa Air Group |
| Barrick Gold Corp |
Mesa Air and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Barrick Gold
The main advantage of trading using opposite Mesa Air and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold'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 |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross Gold |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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