Correlation Between Trupanion and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Trupanion 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 Trupanion and Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and Mesa Air Group, you can compare the effects of market volatilities on Trupanion 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 Trupanion with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and Mesa Air.
Diversification Opportunities for Trupanion and Mesa Air
Pay attention - limited upside
The 3 months correlation between Trupanion and Mesa is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion 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 Trupanion 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 Trupanion 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 Trupanion i.e., Trupanion and Mesa Air go up and down completely randomly.
Pair Corralation between Trupanion and Mesa Air
Given the investment horizon of 90 days Trupanion is expected to under-perform the Mesa Air. But the stock apears to be less risky and, when comparing its historical volatility, Trupanion is 1.23 times less risky than Mesa Air. The stock trades about -0.01 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Mesa Air Group on August 27, 2024 and sell it today you would earn a total of 6.00 from holding Mesa Air Group or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. Mesa Air Group
Performance |
| Timeline |
| Trupanion |
| Mesa Air Group |
Trupanion and Mesa Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and Mesa Air
The main advantage of trading using opposite Trupanion and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion 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.| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |