Correlation Between Ensysce Biosciences and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and AstraZeneca PLC 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 AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensysce Biosciences and AstraZeneca PLC ADR, you can compare the effects of market volatilities on Ensysce Biosciences and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and AstraZeneca PLC.
Diversification Opportunities for Ensysce Biosciences and AstraZeneca PLC
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensysce and AstraZeneca is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and AstraZeneca PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC ADR 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC ADR has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Ensysce Biosciences and AstraZeneca PLC
Given the investment horizon of 90 days Ensysce Biosciences is expected to generate 16.0 times more return on investment than AstraZeneca PLC. However, Ensysce Biosciences is 16.0 times more volatile than AstraZeneca PLC ADR. It trades about 0.08 of its potential returns per unit of risk. AstraZeneca PLC ADR is currently generating about -0.28 per unit of risk. If you would invest 44.00 in Ensysce Biosciences on August 26, 2024 and sell it today you would lose (1.00) from holding Ensysce Biosciences or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensysce Biosciences vs. AstraZeneca PLC ADR
Performance |
| Timeline |
| Ensysce Biosciences |
| AstraZeneca PLC ADR |
Ensysce Biosciences and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensysce Biosciences and AstraZeneca PLC
The main advantage of trading using opposite Ensysce Biosciences and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Ensysce Biosciences vs. Zura Bio Limited | Ensysce Biosciences vs. Phio Pharmaceuticals Corp | Ensysce Biosciences vs. Sonnet Biotherapeutics Holdings | Ensysce Biosciences vs. 180 Life Sciences |
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Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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