Correlation Between Cleantech Power and Mesa Air

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

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

Diversification Opportunities for Cleantech Power and Mesa Air

0.0

Correlation Coefficient

Cleantech Power  Mesa Air

Pay attention - limited upside

The 3 months correlation between Cleantech and Mesa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp 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 Cleantech Power 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 Cleantech Power Corp 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 Cleantech Power i.e., Cleantech Power and Mesa Air go up and down completely randomly.

Pair Corralation between Cleantech Power and Mesa Air

Assuming the 90 days horizon Cleantech Power Corp is expected to generate 13.08 times more return on investment than Mesa Air. However, Cleantech Power is 13.08 times more volatile than Mesa Air Group. It trades about 0.1 of its potential returns per unit of risk. Mesa Air Group is currently generating about 0.0 per unit of risk. If you would invest  5.64  in Cleantech Power Corp on October 3, 2024 and sell it today you would lose (5.05) from holding Cleantech Power Corp or give up 89.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.55%
Values	Daily Returns

Cleantech Power Corp  vs.  Mesa Air Group

Cleantech Power Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleantech Power Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cleantech Power is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Mesa Air Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mesa Air Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Mesa Air may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cleantech Power and Mesa Air

The main advantage of trading using opposite Cleantech Power and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleantech Power 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 Cleantech Power Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.