Correlation Between Mesa Air and TARGET

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

Diversification Opportunities for Mesa Air and TARGET

0.57

Correlation Coefficient

Mesa Air  TARGET

Very weak diversification

The 3 months correlation between Mesa and TARGET is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and TARGET PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TARGET PORATION 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 TARGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TARGET PORATION has no effect on the direction of Mesa Air i.e., Mesa Air and TARGET go up and down completely randomly.

Pair Corralation between Mesa Air and TARGET

Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the TARGET. In addition to that, Mesa Air is 6.75 times more volatile than TARGET PORATION. It trades about -0.03 of its total potential returns per unit of risk. TARGET PORATION is currently generating about -0.17 per unit of volatility. If you would invest  9,170  in TARGET PORATION on September 4, 2024 and sell it today you would lose (616.00) from holding TARGET PORATION or give up 6.72% of portfolio value over 90 days.

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

Mesa Air Group  vs.  TARGET PORATION

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 uncertain 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.

TARGET PORATION

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mesa Air and TARGET

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

The idea behind Mesa Air Group and TARGET PORATION 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.