Correlation Between Mesa Air and Fintech Ecosystem

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

Diversification Opportunities for Mesa Air and Fintech Ecosystem

-0.47

Correlation Coefficient

Mesa Air  Fintech Ecosystem

Very good diversification

The 3 months correlation between Mesa and Fintech is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Fintech Ecosystem Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fintech Ecosystem 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 Fintech Ecosystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fintech Ecosystem has no effect on the direction of Mesa Air i.e., Mesa Air and Fintech Ecosystem go up and down completely randomly.

Pair Corralation between Mesa Air and Fintech Ecosystem

Given the investment horizon of 90 days Mesa Air Group is expected to generate 6.5 times more return on investment than Fintech Ecosystem. However, Mesa Air is 6.5 times more volatile than Fintech Ecosystem Development. It trades about 0.03 of its potential returns per unit of risk. Fintech Ecosystem Development is currently generating about 0.04 per unit of risk. If you would invest  111.00  in Mesa Air Group on September 13, 2024 and sell it today you would lose (6.00) from holding Mesa Air Group or give up 5.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.41%
Values	Daily Returns

Mesa Air Group  vs.  Fintech Ecosystem Development

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.

Fintech Ecosystem

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mesa Air and Fintech Ecosystem

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

The idea behind Mesa Air Group and Fintech Ecosystem Development 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.