Correlation Between Field Trip and Mind Medicine

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

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

Diversification Opportunities for Field Trip and Mind Medicine

-0.12

Correlation Coefficient

Field Trip  Mind Medicine

Good diversification

The 3 months correlation between Field and Mind is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Mind Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Medicine and Field Trip 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 Field Trip Health 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 Field Trip i.e., Field Trip and Mind Medicine go up and down completely randomly.

Pair Corralation between Field Trip and Mind Medicine

Assuming the 90 days horizon Field Trip is expected to generate 5.42 times less return on investment than Mind Medicine. In addition to that, Field Trip is 1.62 times more volatile than Mind Medicine. It trades about 0.01 of its total potential returns per unit of risk. Mind Medicine is currently generating about 0.07 per unit of volatility. If you would invest  249.00  in Mind Medicine on September 23, 2024 and sell it today you would earn a total of  467.00  from holding Mind Medicine or generate 187.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	22.74%
Values	Daily Returns

Field Trip Health  vs.  Mind Medicine

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Field Trip Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Field Trip is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mind Medicine

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mind Medicine are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Mind Medicine exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Field Trip and Mind Medicine

The main advantage of trading using opposite Field Trip and Mind Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Field Trip 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 Field Trip Health 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.