Correlation Between Mesa Air and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Mesa Air and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Sellas Life.
Diversification Opportunities for Mesa Air and Sellas Life
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mesa and Sellas is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Mesa Air i.e., Mesa Air and Sellas Life go up and down completely randomly.
Pair Corralation between Mesa Air and Sellas Life
Given the investment horizon of 90 days Mesa Air Group is expected to generate 1.25 times more return on investment than Sellas Life. However, Mesa Air is 1.25 times more volatile than Sellas Life Sciences. It trades about 0.05 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.04 per unit of risk. If you would invest 69.00 in Mesa Air Group on August 24, 2024 and sell it today you would earn a total of 19.52 from holding Mesa Air Group or generate 28.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Sellas Life Sciences
Performance |
| Timeline |
| Mesa Air Group |
| Sellas Life Sciences |
Mesa Air and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Sellas Life
The main advantage of trading using opposite Mesa Air and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life'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 |
| Sellas Life vs. Lyra Therapeutics | Sellas Life vs. Hookipa Pharma | Sellas Life vs. Cingulate Warrants | Sellas Life vs. SAB Biotherapeutics |
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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