Correlation Between Bright Minds and BrightSpring Health

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

Diversification Opportunities for Bright Minds and BrightSpring Health

0.07

Correlation Coefficient

Bright Minds  BrightSpring Health

Significant diversification

The 3 months correlation between Bright and BrightSpring is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health 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 BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Bright Minds i.e., Bright Minds and BrightSpring Health go up and down completely randomly.

Pair Corralation between Bright Minds and BrightSpring Health

Given the investment horizon of 90 days Bright Minds Biosciences is expected to generate 1.83 times more return on investment than BrightSpring Health. However, Bright Minds is 1.83 times more volatile than BrightSpring Health Services,. It trades about 0.19 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.05 per unit of risk. If you would invest  2,744  in Bright Minds Biosciences on May 27, 2025 and sell it today you would earn a total of  1,652  from holding Bright Minds Biosciences or generate 60.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bright Minds Biosciences  vs.  BrightSpring Health Services,

Bright Minds Biosciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Minds Biosciences are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Bright Minds reported solid returns over the last few months and may actually be approaching a breakup point.

BrightSpring Health

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in BrightSpring Health Services, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, BrightSpring Health may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bright Minds and BrightSpring Health

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

The idea behind Bright Minds Biosciences and BrightSpring Health Services, 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.