Correlation Between JPMORGAN and Mesa Air

Can any of the company-specific risk be diversified away by investing in both JPMORGAN 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 JPMORGAN and Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMORGAN CHASE 5625 and Mesa Air Group, you can compare the effects of market volatilities on JPMORGAN 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 JPMORGAN with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMORGAN and Mesa Air.

Diversification Opportunities for JPMORGAN and Mesa Air

0.61

Correlation Coefficient

JPMORGAN  Mesa Air

Poor diversification

The 3 months correlation between JPMORGAN and Mesa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMORGAN CHASE 5625 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 JPMORGAN 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 JPMORGAN CHASE 5625 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 JPMORGAN i.e., JPMORGAN and Mesa Air go up and down completely randomly.

Pair Corralation between JPMORGAN and Mesa Air

Assuming the 90 days trading horizon JPMORGAN CHASE 5625 is expected to generate 0.46 times more return on investment than Mesa Air. However, JPMORGAN CHASE 5625 is 2.18 times less risky than Mesa Air. It trades about -0.03 of its potential returns per unit of risk. Mesa Air Group is currently generating about -0.05 per unit of risk. If you would invest  10,830  in JPMORGAN CHASE 5625 on September 12, 2024 and sell it today you would lose (533.00) from holding JPMORGAN CHASE 5625 or give up 4.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

JPMORGAN CHASE 5625  vs.  Mesa Air Group

JPMORGAN CHASE 5625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMORGAN CHASE 5625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JPMORGAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with JPMORGAN and Mesa Air

The main advantage of trading using opposite JPMORGAN and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMORGAN 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.

The idea behind JPMORGAN CHASE 5625 and Mesa Air Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.