Correlation Between Mesa Air and A SPAC

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

Diversification Opportunities for Mesa Air and A SPAC

0.34

Correlation Coefficient

Mesa Air  A SPAC

Weak diversification

The 3 months correlation between Mesa and ASPC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and A SPAC III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC III 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC III has no effect on the direction of Mesa Air i.e., Mesa Air and A SPAC go up and down completely randomly.

Pair Corralation between Mesa Air and A SPAC

Given the investment horizon of 90 days Mesa Air Group is expected to generate 17.04 times more return on investment than A SPAC. However, Mesa Air is 17.04 times more volatile than A SPAC III. It trades about 0.04 of its potential returns per unit of risk. A SPAC III is currently generating about 0.1 per unit of risk. If you would invest  106.00  in Mesa Air Group on May 16, 2025 and sell it today you would earn a total of  4.00  from holding Mesa Air Group or generate 3.77% 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.  A SPAC III

Mesa Air Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Mesa Air Group are ranked lower than 2 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

A SPAC III

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC III are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, A SPAC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mesa Air and A SPAC

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

The idea behind Mesa Air Group and A SPAC III 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.