Correlation Between Mesa Air and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Nomura Holdings 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 Nomura Holdings 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 Nomura Holdings ADR, you can compare the effects of market volatilities on Mesa Air and Nomura Holdings 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 Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Nomura Holdings.
Diversification Opportunities for Mesa Air and Nomura Holdings
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mesa and Nomura is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Nomura Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings ADR 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings ADR has no effect on the direction of Mesa Air i.e., Mesa Air and Nomura Holdings go up and down completely randomly.
Pair Corralation between Mesa Air and Nomura Holdings
Given the investment horizon of 90 days Mesa Air Group is expected to generate 3.49 times more return on investment than Nomura Holdings. However, Mesa Air is 3.49 times more volatile than Nomura Holdings ADR. It trades about 0.02 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.06 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Nomura Holdings ADR
Performance |
| Timeline |
| Mesa Air Group |
| Nomura Holdings ADR |
Mesa Air and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Nomura Holdings
The main advantage of trading using opposite Mesa Air and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
| Nomura Holdings vs. Perella Weinberg Partners | Nomura Holdings vs. Oppenheimer Holdings | Nomura Holdings vs. Stifel Financial Corp | Nomura Holdings vs. Piper Sandler Companies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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