Correlation Between Mesa Air and SNDL
Can any of the company-specific risk be diversified away by investing in both Mesa Air and SNDL 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 SNDL 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 SNDL Inc, you can compare the effects of market volatilities on Mesa Air and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and SNDL.
Diversification Opportunities for Mesa Air and SNDL
Good diversification
The 3 months correlation between Mesa and SNDL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Mesa Air i.e., Mesa Air and SNDL go up and down completely randomly.
Pair Corralation between Mesa Air and SNDL
Given the investment horizon of 90 days Mesa Air Group is expected to generate 0.89 times more return on investment than SNDL. However, Mesa Air Group is 1.12 times less risky than SNDL. It trades about 0.14 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.11 per unit of risk. If you would invest 92.00 in Mesa Air Group on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Mesa Air Group or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. SNDL Inc
Performance |
| Timeline |
| Mesa Air Group |
| SNDL Inc |
Mesa Air and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and SNDL
The main advantage of trading using opposite Mesa Air and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL'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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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