Correlation Between Mesa Air and Ault Alliance

Can any of the company-specific risk be diversified away by investing in both Mesa Air and Ault Alliance 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 Ault Alliance 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 Ault Alliance, you can compare the effects of market volatilities on Mesa Air and Ault Alliance 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 Ault Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Ault Alliance.

Diversification Opportunities for Mesa Air and Ault Alliance

0.41

Correlation Coefficient

Mesa Air  Ault Alliance

Very weak diversification

The 3 months correlation between Mesa and Ault is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance 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 Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Mesa Air i.e., Mesa Air and Ault Alliance go up and down completely randomly.

Pair Corralation between Mesa Air and Ault Alliance

If you would invest  88.00  in Mesa Air Group on September 15, 2024 and sell it today you would earn a total of  19.00  from holding Mesa Air Group or generate 21.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Mesa Air Group  vs.  Ault Alliance

Mesa Air Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mesa Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Ault Alliance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mesa Air and Ault Alliance

The main advantage of trading using opposite Mesa Air and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.

The idea behind Mesa Air Group and Ault Alliance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.