Correlation Between Bright Minds and Intel

Can any of the company-specific risk be diversified away by investing in both Bright Minds and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on Bright Minds and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Minds and Intel.

Diversification Opportunities for Bright Minds and Intel

-0.17

Correlation Coefficient

Bright Minds  Intel

Good diversification

The 3 months correlation between Bright and Intel is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Bright Minds i.e., Bright Minds and Intel go up and down completely randomly.

Pair Corralation between Bright Minds and Intel

Given the investment horizon of 90 days Bright Minds is expected to generate 2.97 times less return on investment than Intel. In addition to that, Bright Minds is 1.15 times more volatile than Intel. It trades about 0.02 of its total potential returns per unit of risk. Intel is currently generating about 0.07 per unit of volatility. If you would invest  1,982  in Intel on December 28, 2024 and sell it today you would earn a total of  289.00  from holding Intel or generate 14.58% 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.  Intel

Bright Minds Biosciences

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Minds Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Bright Minds may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bright Minds and Intel

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

The idea behind Bright Minds Biosciences and Intel 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.