Correlation Between Mind Medicine and Field Trip

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

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

Diversification Opportunities for Mind Medicine and Field Trip

-0.12

Correlation Coefficient

Mind Medicine  Field Trip

Good diversification

The 3 months correlation between Mind and Field is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mind Medicine and Field Trip Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Field Trip Health 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 Field Trip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Field Trip Health has no effect on the direction of Mind Medicine i.e., Mind Medicine and Field Trip go up and down completely randomly.

Pair Corralation between Mind Medicine and Field Trip

Given the investment horizon of 90 days Mind Medicine is expected to generate 0.62 times more return on investment than Field Trip. However, Mind Medicine is 1.62 times less risky than Field Trip. It trades about 0.07 of its potential returns per unit of risk. Field Trip Health is currently generating about 0.01 per unit of risk. 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

Mind Medicine  vs.  Field Trip Health

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.

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.

Pair Trading with Mind Medicine and Field Trip

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

The idea behind Mind Medicine and Field Trip Health 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 Commodity Directory module to find actively traded commodities issued by global exchanges.