Correlation Between Ensysce Biosciences and Windtree Therapeutics

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

Diversification Opportunities for Ensysce Biosciences and Windtree Therapeutics

-0.14

Correlation Coefficient

Ensysce Biosciences  Windtree Therapeutics

Good diversification

The 3 months correlation between Ensysce and Windtree is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree 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 Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Windtree Therapeutics go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Windtree Therapeutics

Given the investment horizon of 90 days Ensysce Biosciences is expected to generate 2.22 times more return on investment than Windtree Therapeutics. However, Ensysce Biosciences is 2.22 times more volatile than Windtree Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about -0.22 per unit of risk. If you would invest  37.00  in Ensysce Biosciences on September 1, 2024 and sell it today you would earn a total of  12.00  from holding Ensysce Biosciences or generate 32.43% 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.  Windtree Therapeutics

Ensysce Biosciences

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ensysce Biosciences are ranked lower than 7 (%) 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.

Windtree Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Windtree Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ensysce Biosciences and Windtree Therapeutics

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

The idea behind Ensysce Biosciences and Windtree 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.