Correlation Between Mesa Air and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Mesa Air and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on Mesa Air and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and SEI Investments.
Diversification Opportunities for Mesa Air and SEI Investments
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mesa and SEI is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Mesa Air i.e., Mesa Air and SEI Investments go up and down completely randomly.
Pair Corralation between Mesa Air and SEI Investments
Given the investment horizon of 90 days Mesa Air Group is expected to generate 3.28 times more return on investment than SEI Investments. However, Mesa Air is 3.28 times more volatile than SEI Investments. It trades about 0.21 of its potential returns per unit of risk. SEI Investments is currently generating about 0.28 per unit of risk. If you would invest 94.00 in Mesa Air Group on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Mesa Air Group or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. SEI Investments
Performance |
| Timeline |
| Mesa Air Group |
| SEI Investments |
Mesa Air and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and SEI Investments
The main advantage of trading using opposite Mesa Air and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Mesa Air vs. American Airlines Group | Mesa Air vs. Southwest Airlines | Mesa Air vs. JetBlue Airways Corp | Mesa Air vs. Frontier Group Holdings |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Stocks Directory module to find actively traded stocks across global markets.
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