Correlation Between Bright Minds and Sage Therapeutic
Can any of the company-specific risk be diversified away by investing in both Bright Minds and Sage Therapeutic 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 Bright Minds and Sage Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Minds Biosciences and Sage Therapeutic, you can compare the effects of market volatilities on Bright Minds and Sage Therapeutic 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 Bright Minds with a short position of Sage Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Minds and Sage Therapeutic.
Diversification Opportunities for Bright Minds and Sage Therapeutic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and Sage is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Sage Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Therapeutic and Bright Minds 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 Bright Minds Biosciences are associated (or correlated) with Sage Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Therapeutic has no effect on the direction of Bright Minds i.e., Bright Minds and Sage Therapeutic go up and down completely randomly.
Pair Corralation between Bright Minds and Sage Therapeutic
Given the investment horizon of 90 days Bright Minds Biosciences is expected to generate 17.45 times more return on investment than Sage Therapeutic. However, Bright Minds is 17.45 times more volatile than Sage Therapeutic. It trades about 0.09 of its potential returns per unit of risk. Sage Therapeutic is currently generating about 0.01 per unit of risk. If you would invest 120.00 in Bright Minds Biosciences on January 7, 2025 and sell it today you would earn a total of 2,805 from holding Bright Minds Biosciences or generate 2337.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Minds Biosciences vs. Sage Therapeutic
Performance |
| Timeline |
| Bright Minds Biosciences |
| Sage Therapeutic |
Bright Minds and Sage Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Minds and Sage Therapeutic
The main advantage of trading using opposite Bright Minds and Sage Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Minds position performs unexpectedly, Sage Therapeutic 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 Sage Therapeutic will offset losses from the drop in Sage Therapeutic's long position.| Bright Minds vs. Revelation Biosciences | Bright Minds vs. Zura Bio Limited | Bright Minds vs. Phio Pharmaceuticals Corp | Bright Minds vs. ZyVersa Therapeutics |
| Sage Therapeutic vs. Apellis Pharmaceuticals | Sage Therapeutic vs. Terns Pharmaceuticals | Sage Therapeutic vs. Day One Biopharmaceuticals | Sage Therapeutic vs. Blueprint Medicines Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |