Correlation Between Mesa Air and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA ADR, you can compare the effects of market volatilities on Mesa Air and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Schibsted ASA.
Diversification Opportunities for Mesa Air and Schibsted ASA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesa and Schibsted is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Schibsted ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA ADR has no effect on the direction of Mesa Air i.e., Mesa Air and Schibsted ASA go up and down completely randomly.
Pair Corralation between Mesa Air and Schibsted ASA
Given the investment horizon of 90 days Mesa Air Group is expected to generate 1.34 times more return on investment than Schibsted ASA. However, Mesa Air is 1.34 times more volatile than Schibsted ASA ADR. It trades about 0.18 of its potential returns per unit of risk. Schibsted ASA ADR is currently generating about -0.07 per unit of risk. If you would invest 105.00 in Mesa Air Group on October 7, 2024 and sell it today you would earn a total of 21.00 from holding Mesa Air Group or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Schibsted ASA ADR
Performance |
| Timeline |
| Mesa Air Group |
| Schibsted ASA ADR |
Mesa Air and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Schibsted ASA
The main advantage of trading using opposite Mesa Air and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA'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 |
| Schibsted ASA vs. Norfolk Southern | Schibsted ASA vs. Apogee Enterprises | Schibsted ASA vs. Hooker Furniture | Schibsted ASA vs. Sonos Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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