Correlation Between Mesa Air and Stagwell
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Stagwell 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 Stagwell 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 Stagwell, you can compare the effects of market volatilities on Mesa Air and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Stagwell.
Diversification Opportunities for Mesa Air and Stagwell
Significant diversification
The 3 months correlation between Mesa and Stagwell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Mesa Air i.e., Mesa Air and Stagwell go up and down completely randomly.
Pair Corralation between Mesa Air and Stagwell
Given the investment horizon of 90 days Mesa Air is expected to generate 2.41 times less return on investment than Stagwell. In addition to that, Mesa Air is 1.8 times more volatile than Stagwell. It trades about 0.01 of its total potential returns per unit of risk. Stagwell is currently generating about 0.03 per unit of volatility. If you would invest 665.00 in Stagwell on August 31, 2024 and sell it today you would earn a total of 121.00 from holding Stagwell or generate 18.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mesa Air Group vs. Stagwell
Performance |
| Timeline |
| Mesa Air Group |
| Stagwell |
Mesa Air and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Stagwell
The main advantage of trading using opposite Mesa Air and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell'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 |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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