Correlation Between Ensysce Biosciences and Fortress Biotech

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

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

Diversification Opportunities for Ensysce Biosciences and Fortress Biotech

-0.46

Correlation Coefficient

Ensysce Biosciences  Fortress Biotech

Very good diversification

The 3 months correlation between Ensysce and Fortress is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Fortress Biotech Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech Pref 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 Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech Pref has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Fortress Biotech go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Fortress Biotech

If you would invest  582.00  in Fortress Biotech Pref on October 22, 2024 and sell it today you would earn a total of  116.00  from holding Fortress Biotech Pref or generate 19.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.64%
Values	Daily Returns

Ensysce Biosciences  vs.  Fortress Biotech Pref

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.

Fortress Biotech Pref

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Biotech Pref are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Fortress Biotech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ensysce Biosciences and Fortress Biotech

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

The idea behind Ensysce Biosciences and Fortress Biotech Pref 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.