Correlation Between Chimerix and Mind Medicine

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

By analyzing existing cross correlation between Chimerix and Mind Medicine, you can compare the effects of market volatilities on Chimerix and Mind Medicine 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 Chimerix with a short position of Mind Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and Mind Medicine.

Diversification Opportunities for Chimerix and Mind Medicine

-0.41

Correlation Coefficient

Chimerix  Mind Medicine

Very good diversification

The 3 months correlation between Chimerix and Mind is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and Mind Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Medicine and Chimerix 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 Chimerix are associated (or correlated) with Mind Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Medicine has no effect on the direction of Chimerix i.e., Chimerix and Mind Medicine go up and down completely randomly.

Pair Corralation between Chimerix and Mind Medicine

Given the investment horizon of 90 days Chimerix is expected to generate 1.7 times more return on investment than Mind Medicine. However, Chimerix is 1.7 times more volatile than Mind Medicine. It trades about 0.19 of its potential returns per unit of risk. Mind Medicine is currently generating about 0.02 per unit of risk. If you would invest  344.00  in Chimerix on December 28, 2024 and sell it today you would earn a total of  506.00  from holding Chimerix or generate 147.09% return on investment over 90 days.

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

Chimerix  vs.  Mind Medicine

Chimerix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chimerix are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chimerix showed solid returns over the last few months and may actually be approaching a breakup point.

Mind Medicine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Medicine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Mind Medicine is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chimerix and Mind Medicine

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

The idea behind Chimerix and Mind Medicine 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.