Correlation Between EnGene Holdings and Ensysce Biosciences

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

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

Diversification Opportunities for EnGene Holdings and Ensysce Biosciences

0.01

Correlation Coefficient

EnGene Holdings  Ensysce Biosciences

Significant diversification

The 3 months correlation between EnGene and Ensysce is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding enGene Holdings Common and Ensysce Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensysce Biosciences and EnGene Holdings 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 enGene Holdings Common 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 EnGene Holdings i.e., EnGene Holdings and Ensysce Biosciences go up and down completely randomly.

Pair Corralation between EnGene Holdings and Ensysce Biosciences

Given the investment horizon of 90 days EnGene Holdings is expected to generate 2.98 times less return on investment than Ensysce Biosciences. In addition to that, EnGene Holdings is 1.4 times more volatile than Ensysce Biosciences. It trades about 0.03 of its total potential returns per unit of risk. Ensysce Biosciences is currently generating about 0.13 per unit of volatility. If you would invest  721.00  in Ensysce Biosciences on October 9, 2024 and sell it today you would earn a total of  141.00  from holding Ensysce Biosciences or generate 19.56% return on investment over 90 days.

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

enGene Holdings Common  vs.  Ensysce Biosciences

enGene Holdings Common

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Ensysce Biosciences

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ensysce Biosciences are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ensysce Biosciences exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EnGene Holdings and Ensysce Biosciences

The main advantage of trading using opposite EnGene Holdings and Ensysce Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnGene Holdings 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 enGene Holdings Common 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.