Correlation Between Mesa Air and CSX

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

Diversification Opportunities for Mesa Air and CSX

-0.54

Correlation Coefficient

Mesa Air  CSX

Excellent diversification

The 3 months correlation between Mesa and CSX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation 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 CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of Mesa Air i.e., Mesa Air and CSX go up and down completely randomly.

Pair Corralation between Mesa Air and CSX

Given the investment horizon of 90 days Mesa Air is expected to generate 2.47 times less return on investment than CSX. In addition to that, Mesa Air is 1.97 times more volatile than CSX Corporation. It trades about 0.06 of its total potential returns per unit of risk. CSX Corporation is currently generating about 0.27 per unit of volatility. If you would invest  2,767  in CSX Corporation on April 22, 2025 and sell it today you would earn a total of  672.00  from holding CSX Corporation or generate 24.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mesa Air Group  vs.  CSX Corp.

Mesa Air Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mesa Air Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Mesa Air may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CSX Corporation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CSX Corporation are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, CSX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mesa Air and CSX

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

The idea behind Mesa Air Group and CSX Corporation 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.