Correlation Between Mesa Air and Jutal Offshore

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

Diversification Opportunities for Mesa Air and Jutal Offshore

0.29

Correlation Coefficient

Mesa Air  Jutal Offshore

Modest diversification

The 3 months correlation between Mesa and Jutal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Mesa Air i.e., Mesa Air and Jutal Offshore go up and down completely randomly.

Pair Corralation between Mesa Air and Jutal Offshore

Given the investment horizon of 90 days Mesa Air Group is expected to generate 4.26 times more return on investment than Jutal Offshore. However, Mesa Air is 4.26 times more volatile than Jutal Offshore Oil. It trades about 0.06 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.12 per unit of risk. If you would invest  121.00  in Mesa Air Group on September 28, 2024 and sell it today you would earn a total of  12.00  from holding Mesa Air Group or generate 9.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Mesa Air Group  vs.  Jutal Offshore Oil

Mesa Air Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mesa Air Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Mesa Air sustained solid returns over the last few months and may actually be approaching a breakup point.

Jutal Offshore Oil

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mesa Air and Jutal Offshore

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

The idea behind Mesa Air Group and Jutal Offshore Oil 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.