Correlation Between Mesa Air and Marten Transport

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

Diversification Opportunities for Mesa Air and Marten Transport

0.92

Correlation Coefficient

Mesa Air  Marten Transport

Almost no diversification

The 3 months correlation between Mesa and Marten is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Marten Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marten Transport 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 Marten Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marten Transport has no effect on the direction of Mesa Air i.e., Mesa Air and Marten Transport go up and down completely randomly.

Pair Corralation between Mesa Air and Marten Transport

Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Marten Transport. In addition to that, Mesa Air is 2.23 times more volatile than Marten Transport. It trades about -0.23 of its total potential returns per unit of risk. Marten Transport is currently generating about -0.15 per unit of volatility. If you would invest  1,563  in Marten Transport on January 5, 2025 and sell it today you would lose (243.00) from holding Marten Transport or give up 15.55% of portfolio value over 90 days.

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

Mesa Air Group  vs.  Marten Transport

Mesa Air Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mesa Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Marten Transport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marten Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mesa Air and Marten Transport

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

The idea behind Mesa Air Group and Marten Transport 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.