Correlation Between Citigroup and Ensysce Biosciences

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

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

Diversification Opportunities for Citigroup and Ensysce Biosciences

-0.65

Correlation Coefficient

Citigroup  Ensysce Biosciences

Excellent diversification

The 3 months correlation between Citigroup and Ensysce is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Ensysce Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensysce Biosciences and Citigroup 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 Citigroup are associated (or correlated) with Ensysce Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensysce Biosciences has no effect on the direction of Citigroup i.e., Citigroup and Ensysce Biosciences go up and down completely randomly.

Pair Corralation between Citigroup and Ensysce Biosciences

If you would invest  0.90  in Ensysce Biosciences on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Ensysce Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Citigroup  vs.  Ensysce Biosciences

Citigroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ensysce Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ensysce Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Ensysce Biosciences is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Citigroup and Ensysce Biosciences

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

The idea behind Citigroup and Ensysce 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.