Correlation Between Calithera Biosciences and Bright Minds

Can any of the company-specific risk be diversified away by investing in both Calithera Biosciences and Bright Minds 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 Calithera Biosciences and Bright Minds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calithera Biosciences and Bright Minds Biosciences, you can compare the effects of market volatilities on Calithera Biosciences and Bright Minds 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 Calithera Biosciences with a short position of Bright Minds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calithera Biosciences and Bright Minds.

Diversification Opportunities for Calithera Biosciences and Bright Minds

0.39

Correlation Coefficient

Calithera Biosciences  Bright Minds

Weak diversification

The 3 months correlation between Calithera and Bright is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calithera Biosciences and Bright Minds Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Minds Biosciences and Calithera Biosciences 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 Calithera Biosciences are associated (or correlated) with Bright Minds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Minds Biosciences has no effect on the direction of Calithera Biosciences i.e., Calithera Biosciences and Bright Minds go up and down completely randomly.

Pair Corralation between Calithera Biosciences and Bright Minds

If you would invest  109.00  in Bright Minds Biosciences on September 2, 2024 and sell it today you would earn a total of  4,291  from holding Bright Minds Biosciences or generate 3936.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Calithera Biosciences  vs.  Bright Minds Biosciences

Calithera Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calithera Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Calithera Biosciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Calithera Biosciences and Bright Minds

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

The idea behind Calithera Biosciences and Bright Minds Biosciences 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.