Correlation Between Mesa Air and CopAur Minerals

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

Diversification Opportunities for Mesa Air and CopAur Minerals

0.37

Correlation Coefficient

Mesa Air  CopAur Minerals

Weak diversification

The 3 months correlation between Mesa and CopAur is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and CopAur Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CopAur Minerals 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 CopAur Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CopAur Minerals has no effect on the direction of Mesa Air i.e., Mesa Air and CopAur Minerals go up and down completely randomly.

Pair Corralation between Mesa Air and CopAur Minerals

Given the investment horizon of 90 days Mesa Air Group is expected to generate 1.06 times more return on investment than CopAur Minerals. However, Mesa Air is 1.06 times more volatile than CopAur Minerals. It trades about 0.03 of its potential returns per unit of risk. CopAur Minerals is currently generating about -0.02 per unit of risk. If you would invest  106.00  in Mesa Air Group on September 15, 2024 and sell it today you would earn a total of  1.00  from holding Mesa Air Group or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mesa Air Group  vs.  CopAur Minerals

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.

CopAur Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CopAur Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Mesa Air and CopAur Minerals

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

The idea behind Mesa Air Group and CopAur Minerals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.