Correlation Between Mesa Air and Miniso Group

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

Diversification Opportunities for Mesa Air and Miniso Group

0.12

Correlation Coefficient

Mesa Air  Miniso Group

Average diversification

The 3 months correlation between Mesa and Miniso is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Mesa Air i.e., Mesa Air and Miniso Group go up and down completely randomly.

Pair Corralation between Mesa Air and Miniso Group

Given the investment horizon of 90 days Mesa Air is expected to generate 2.34 times less return on investment than Miniso Group. But when comparing it to its historical volatility, Mesa Air Group is 1.14 times less risky than Miniso Group. It trades about 0.18 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  1,690  in Miniso Group Holding on September 24, 2024 and sell it today you would earn a total of  711.50  from holding Miniso Group Holding or generate 42.1% return on investment over 90 days.

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

Mesa Air Group  vs.  Miniso Group Holding

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 somewhat strong basic indicators, Mesa Air is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Miniso Group Holding

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mesa Air and Miniso Group

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

The idea behind Mesa Air Group and Miniso Group Holding 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.