Correlation Between Mesa Air and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Grupo Simec 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 Grupo Simec 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 Grupo Simec SAB, you can compare the effects of market volatilities on Mesa Air and Grupo Simec 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 Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Grupo Simec.
Diversification Opportunities for Mesa Air and Grupo Simec
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mesa and Grupo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Mesa Air i.e., Mesa Air and Grupo Simec go up and down completely randomly.
Pair Corralation between Mesa Air and Grupo Simec
Given the investment horizon of 90 days Mesa Air Group is expected to generate 2.16 times more return on investment than Grupo Simec. However, Mesa Air is 2.16 times more volatile than Grupo Simec SAB. It trades about 0.0 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.03 per unit of risk. If you would invest 136.00 in Mesa Air Group on August 31, 2024 and sell it today you would lose (28.00) from holding Mesa Air Group or give up 20.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.4% |
| Values | Daily Returns |
Mesa Air Group vs. Grupo Simec SAB
Performance |
| Timeline |
| Mesa Air Group |
| Grupo Simec SAB |
Mesa Air and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Grupo Simec
The main advantage of trading using opposite Mesa Air and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec'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 |
| Grupo Simec vs. Nucor Corp | Grupo Simec vs. Steel Dynamics | Grupo Simec vs. ArcelorMittal SA ADR | Grupo Simec vs. Gerdau SA ADR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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