Correlation Between Mind Medicine and I Mab

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

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

Diversification Opportunities for Mind Medicine and I Mab

-0.18

Correlation Coefficient

Mind Medicine  I Mab

Good diversification

The 3 months correlation between Mind and IMAB is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mind Medicine and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab 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 I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Mind Medicine i.e., Mind Medicine and I Mab go up and down completely randomly.

Pair Corralation between Mind Medicine and I Mab

Given the investment horizon of 90 days Mind Medicine is expected to under-perform the I Mab. In addition to that, Mind Medicine is 2.24 times more volatile than I Mab. It trades about -0.1 of its total potential returns per unit of risk. I Mab is currently generating about -0.05 per unit of volatility. If you would invest  95.00  in I Mab on December 4, 2024 and sell it today you would lose (4.08) from holding I Mab or give up 4.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Mind Medicine  vs.  I Mab

Mind Medicine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mind Medicine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

I Mab

Risk-Adjusted Performance

Very Weak

Over the last 90 days I Mab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mind Medicine and I Mab

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

The idea behind Mind Medicine and I Mab 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.