Correlation Between Ensysce Biosciences and Option Care
Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and Option Care 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 Option Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensysce Biosciences and Option Care Health, you can compare the effects of market volatilities on Ensysce Biosciences and Option Care 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 Option Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and Option Care.
Diversification Opportunities for Ensysce Biosciences and Option Care
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ensysce and Option is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health 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 Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Option Care go up and down completely randomly.
Pair Corralation between Ensysce Biosciences and Option Care
Given the investment horizon of 90 days Ensysce Biosciences is expected to under-perform the Option Care. In addition to that, Ensysce Biosciences is 1.4 times more volatile than Option Care Health. It trades about -0.15 of its total potential returns per unit of risk. Option Care Health is currently generating about 0.44 per unit of volatility. If you would invest 2,270 in Option Care Health on November 3, 2024 and sell it today you would earn a total of 822.00 from holding Option Care Health or generate 36.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ensysce Biosciences vs. Option Care Health
Performance |
| Timeline |
| Ensysce Biosciences |
| Option Care Health |
Ensysce Biosciences and Option Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensysce Biosciences and Option Care
The main advantage of trading using opposite Ensysce Biosciences and Option Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, Option Care 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 Option Care will offset losses from the drop in Option Care'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 |
| Option Care vs. Addus HomeCare | Option Care vs. Acadia Healthcare | Option Care vs. Encompass Health Corp | Option Care vs. Select Medical Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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