Correlation Between NOVHOL and Mesa Air

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

By analyzing existing cross correlation between NOVHOL 6625 15 APR 29 and Mesa Air Group, you can compare the effects of market volatilities on NOVHOL 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 NOVHOL with a short position of Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOVHOL and Mesa Air.

Diversification Opportunities for NOVHOL and Mesa Air

-0.1

Correlation Coefficient

NOVHOL  Mesa Air

Good diversification

The 3 months correlation between NOVHOL and Mesa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NOVHOL 6625 15 APR 29 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 NOVHOL 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 NOVHOL 6625 15 APR 29 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 NOVHOL i.e., NOVHOL and Mesa Air go up and down completely randomly.

Pair Corralation between NOVHOL and Mesa Air

Assuming the 90 days trading horizon NOVHOL 6625 15 APR 29 is expected to under-perform the Mesa Air. But the bond apears to be less risky and, when comparing its historical volatility, NOVHOL 6625 15 APR 29 is 17.25 times less risky than Mesa Air. The bond trades about -0.16 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Mesa Air Group on September 21, 2024 and sell it today you would earn a total of  27.50  from holding Mesa Air Group or generate 31.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

NOVHOL 6625 15 APR 29  vs.  Mesa Air Group

NOVHOL 6625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVHOL 6625 15 APR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NOVHOL 6625 15 APR 29 investors.

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

Pair Trading with NOVHOL and Mesa Air

The main advantage of trading using opposite NOVHOL and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOVHOL 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 NOVHOL 6625 15 APR 29 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.