Correlation Between Bright Minds and Vaxart

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

Diversification Opportunities for Bright Minds and Vaxart

-0.64

Correlation Coefficient

Bright Minds  Vaxart

Excellent diversification

The 3 months correlation between Bright and Vaxart is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Vaxart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxart Inc 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 Vaxart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxart Inc has no effect on the direction of Bright Minds i.e., Bright Minds and Vaxart go up and down completely randomly.

Pair Corralation between Bright Minds and Vaxart

Given the investment horizon of 90 days Bright Minds Biosciences is expected to generate 32.18 times more return on investment than Vaxart. However, Bright Minds is 32.18 times more volatile than Vaxart Inc. It trades about 0.15 of its potential returns per unit of risk. Vaxart Inc is currently generating about -0.13 per unit of risk. If you would invest  125.00  in Bright Minds Biosciences on September 12, 2024 and sell it today you would earn a total of  3,611  from holding Bright Minds Biosciences or generate 2888.8% return on investment over 90 days.

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

Bright Minds Biosciences  vs.  Vaxart Inc

Bright Minds Biosciences

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Minds Biosciences are ranked lower than 11 (%) 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.

Vaxart Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaxart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bright Minds and Vaxart

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

The idea behind Bright Minds Biosciences and Vaxart Inc 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.