Correlation Between Ensysce Biosciences and XOMA
Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and XOMA 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 XOMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensysce Biosciences and XOMA Corporation, you can compare the effects of market volatilities on Ensysce Biosciences and XOMA 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 XOMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and XOMA.
Diversification Opportunities for Ensysce Biosciences and XOMA
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensysce and XOMA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and XOMA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA 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 XOMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and XOMA go up and down completely randomly.
Pair Corralation between Ensysce Biosciences and XOMA
Assuming the 90 days horizon Ensysce Biosciences is expected to generate 66.18 times more return on investment than XOMA. However, Ensysce Biosciences is 66.18 times more volatile than XOMA Corporation. It trades about 0.13 of its potential returns per unit of risk. XOMA Corporation is currently generating about 0.06 per unit of risk. If you would invest 2.00 in Ensysce Biosciences on August 28, 2024 and sell it today you would lose (1.10) from holding Ensysce Biosciences or give up 55.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.01% |
| Values | Daily Returns |
Ensysce Biosciences vs. XOMA Corp.
Performance |
| Timeline |
| Ensysce Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| XOMA |
Ensysce Biosciences and XOMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensysce Biosciences and XOMA
The main advantage of trading using opposite Ensysce Biosciences and XOMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, XOMA 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 XOMA will offset losses from the drop in XOMA's long position.| Ensysce Biosciences vs. Ensysce Biosciences | Ensysce Biosciences vs. NRx Pharmaceuticals | Ensysce Biosciences vs. Pasithea Therapeutics Corp | Ensysce Biosciences vs. Faraday Future Intelligent |
| XOMA vs. Harrow Health 8625 | XOMA vs. SiriusPoint | XOMA vs. New York Mortgage | XOMA vs. Sachem Capital Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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