Correlation Between Mesa Air and Contango ORE

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

Diversification Opportunities for Mesa Air and Contango ORE

-0.23

Correlation Coefficient

Mesa Air  Contango ORE

Very good diversification

The 3 months correlation between Mesa and Contango is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Mesa Air i.e., Mesa Air and Contango ORE go up and down completely randomly.

Pair Corralation between Mesa Air and Contango ORE

Given the investment horizon of 90 days Mesa Air is expected to generate 7.08 times less return on investment than Contango ORE. But when comparing it to its historical volatility, Mesa Air Group is 1.62 times less risky than Contango ORE. It trades about 0.03 of its potential returns per unit of risk. Contango ORE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,406  in Contango ORE on April 30, 2025 and sell it today you would earn a total of  547.00  from holding Contango ORE or generate 38.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Mesa Air Group  vs.  Contango ORE

Mesa Air Group

Risk-Adjusted Performance

Weak

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.

Contango ORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Contango ORE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Contango ORE displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mesa Air and Contango ORE

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

The idea behind Mesa Air Group and Contango ORE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.