Correlation Between Mind Medicine and Chimerix

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

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

Diversification Opportunities for Mind Medicine and Chimerix

-0.41

Correlation Coefficient

Mind Medicine  Chimerix

Very good diversification

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

Pair Corralation between Mind Medicine and Chimerix

Given the investment horizon of 90 days Mind Medicine is expected to generate 20.48 times less return on investment than Chimerix. But when comparing it to its historical volatility, Mind Medicine is 1.7 times less risky than Chimerix. It trades about 0.02 of its potential returns per unit of risk. Chimerix is currently generating about 0.19 of returns per unit of risk over similar time horizon. 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

Mind Medicine  vs.  Chimerix

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.

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.

Pair Trading with Mind Medicine and Chimerix

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

The idea behind Mind Medicine and Chimerix 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.