Correlation Between Ensysce Biosciences and Novartis
Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and Novartis 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 Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensysce Biosciences and Novartis AG ADR, you can compare the effects of market volatilities on Ensysce Biosciences and Novartis 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 Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and Novartis.
Diversification Opportunities for Ensysce Biosciences and Novartis
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensysce and Novartis is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Novartis AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novartis AG 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 Novartis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novartis AG ADR has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Novartis go up and down completely randomly.
Pair Corralation between Ensysce Biosciences and Novartis
Given the investment horizon of 90 days Ensysce Biosciences is expected to generate 13.62 times more return on investment than Novartis. However, Ensysce Biosciences is 13.62 times more volatile than Novartis AG ADR. It trades about 0.1 of its potential returns per unit of risk. Novartis AG ADR is currently generating about -0.33 per unit of risk. If you would invest 54.00 in Ensysce Biosciences on August 23, 2024 and sell it today you would earn a total of 5.00 from holding Ensysce Biosciences or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensysce Biosciences vs. Novartis AG ADR
Performance |
| Timeline |
| Ensysce Biosciences |
| Novartis AG ADR |
Ensysce Biosciences and Novartis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensysce Biosciences and Novartis
The main advantage of trading using opposite Ensysce Biosciences and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, Novartis 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 Novartis will offset losses from the drop in Novartis' long position.| Ensysce Biosciences vs. ZyVersa Therapeutics | Ensysce Biosciences vs. Sonnet Biotherapeutics Holdings | Ensysce Biosciences vs. Zura Bio Limited | Ensysce Biosciences vs. Phio Pharmaceuticals Corp |
| Novartis vs. AstraZeneca PLC ADR | Novartis vs. GlaxoSmithKline PLC ADR | Novartis vs. Roche Holding Ltd | Novartis vs. Bristol Myers Squibb |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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