Correlation Between Ensysce Biosciences and Enliven Therapeutics

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

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

Diversification Opportunities for Ensysce Biosciences and Enliven Therapeutics

-0.32

Correlation Coefficient

Ensysce Biosciences  Enliven Therapeutics

Very good diversification

The 3 months correlation between Ensysce and Enliven is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and Ensysce 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 Ensysce Biosciences are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Enliven Therapeutics

Given the investment horizon of 90 days Ensysce Biosciences is expected to generate 3.34 times more return on investment than Enliven Therapeutics. However, Ensysce Biosciences is 3.34 times more volatile than Enliven Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about 0.05 per unit of risk. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ensysce Biosciences  vs.  Enliven Therapeutics

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.

Enliven Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enliven Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Ensysce Biosciences and Enliven Therapeutics

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

The idea behind Ensysce Biosciences and Enliven Therapeutics 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.