Correlation Between Bright Minds and Myriad Genetics

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

Diversification Opportunities for Bright Minds and Myriad Genetics

-0.47

Correlation Coefficient

Bright Minds  Myriad Genetics

Very good diversification

The 3 months correlation between Bright and Myriad is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Myriad Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myriad Genetics 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 Myriad Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myriad Genetics has no effect on the direction of Bright Minds i.e., Bright Minds and Myriad Genetics go up and down completely randomly.

Pair Corralation between Bright Minds and Myriad Genetics

Given the investment horizon of 90 days Bright Minds Biosciences is expected to generate 2.53 times more return on investment than Myriad Genetics. However, Bright Minds is 2.53 times more volatile than Myriad Genetics. It trades about 0.11 of its potential returns per unit of risk. Myriad Genetics is currently generating about 0.06 per unit of risk. If you would invest  3,764  in Bright Minds Biosciences on October 12, 2024 and sell it today you would earn a total of  340.00  from holding Bright Minds Biosciences or generate 9.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bright Minds Biosciences  vs.  Myriad Genetics

Bright Minds Biosciences

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Minds Biosciences are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Bright Minds reported solid returns over the last few months and may actually be approaching a breakup point.

Myriad Genetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myriad Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bright Minds and Myriad Genetics

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

The idea behind Bright Minds Biosciences and Myriad Genetics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.