Correlation Between PennantPark Floating and Mesa Air
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Mesa Air 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 PennantPark Floating and Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Mesa Air Group, you can compare the effects of market volatilities on PennantPark Floating and Mesa Air 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 PennantPark Floating with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Mesa Air.
Diversification Opportunities for PennantPark Floating and Mesa Air
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and Mesa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group and PennantPark Floating 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 PennantPark Floating Rate are associated (or correlated) with Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Mesa Air go up and down completely randomly.
Pair Corralation between PennantPark Floating and Mesa Air
Given the investment horizon of 90 days PennantPark Floating is expected to generate 56.87 times less return on investment than Mesa Air. But when comparing it to its historical volatility, PennantPark Floating Rate is 6.42 times less risky than Mesa Air. It trades about 0.02 of its potential returns per unit of risk. Mesa Air Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Mesa Air Group on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Mesa Air Group or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Mesa Air Group
Performance |
| Timeline |
| PennantPark Floating Rate |
| Mesa Air Group |
PennantPark Floating and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Mesa Air
The main advantage of trading using opposite PennantPark Floating and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| Mesa Air vs. Canadian Pacific Railway | Mesa Air vs. Werner Enterprises | Mesa Air vs. Canadian National Railway | Mesa Air vs. CSX Corporation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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