Correlation Between Ensysce Biosciences and Enlivex Therapeutics

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

Diversification Opportunities for Ensysce Biosciences and Enlivex Therapeutics

0.5

Correlation Coefficient

Ensysce Biosciences  Enlivex Therapeutics

Very weak diversification

The 3 months correlation between Ensysce and Enlivex is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex 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 Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Enlivex Therapeutics

Given the investment horizon of 90 days Ensysce Biosciences is expected to under-perform the Enlivex Therapeutics. In addition to that, Ensysce Biosciences is 1.23 times more volatile than Enlivex Therapeutics. It trades about -0.23 of its total potential returns per unit of risk. Enlivex Therapeutics is currently generating about -0.03 per unit of volatility. If you would invest  124.00  in Enlivex Therapeutics on December 21, 2024 and sell it today you would lose (15.00) from holding Enlivex Therapeutics or give up 12.1% of portfolio value over 90 days.

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

Ensysce Biosciences  vs.  Enlivex Therapeutics

Ensysce Biosciences

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Enlivex Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Ensysce Biosciences and Enlivex Therapeutics

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

The idea behind Ensysce Biosciences and Enlivex 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.