Correlation Between Mesa Air and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Lincoln Educational 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 Lincoln Educational 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 Lincoln Educational Services, you can compare the effects of market volatilities on Mesa Air and Lincoln Educational 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 Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Lincoln Educational.
Diversification Opportunities for Mesa Air and Lincoln Educational
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesa and Lincoln is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational 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 Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of Mesa Air i.e., Mesa Air and Lincoln Educational go up and down completely randomly.
Pair Corralation between Mesa Air and Lincoln Educational
Given the investment horizon of 90 days Mesa Air is expected to generate 1.26 times less return on investment than Lincoln Educational. In addition to that, Mesa Air is 1.28 times more volatile than Lincoln Educational Services. It trades about 0.2 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.32 per unit of volatility. If you would invest 1,328 in Lincoln Educational Services on September 1, 2024 and sell it today you would earn a total of 315.00 from holding Lincoln Educational Services or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Lincoln Educational Services
Performance |
| Timeline |
| Mesa Air Group |
| Lincoln Educational |
Mesa Air and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Lincoln Educational
The main advantage of trading using opposite Mesa Air and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.| Mesa Air vs. Canadian Pacific Railway | Mesa Air vs. Volaris | Mesa Air vs. Werner Enterprises | Mesa Air vs. Canadian National Railway |
| Lincoln Educational vs. American Public Education | Lincoln Educational vs. ATA Creativity Global | Lincoln Educational vs. Cogna Educacao SA | Lincoln Educational vs. Adtalem Global Education |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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