Correlation Between Seres Therapeutics and Ensysce Biosciences
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Ensysce Biosciences 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 Seres Therapeutics and Ensysce Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Ensysce Biosciences, you can compare the effects of market volatilities on Seres Therapeutics and Ensysce Biosciences 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 Seres Therapeutics with a short position of Ensysce Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Ensysce Biosciences.
Diversification Opportunities for Seres Therapeutics and Ensysce Biosciences
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seres and Ensysce is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Ensysce Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensysce Biosciences and Seres Therapeutics 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 Seres Therapeutics are associated (or correlated) with Ensysce Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensysce Biosciences has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Ensysce Biosciences go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Ensysce Biosciences
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 2.62 times less return on investment than Ensysce Biosciences. But when comparing it to its historical volatility, Seres Therapeutics is 2.04 times less risky than Ensysce Biosciences. It trades about 0.16 of its potential returns per unit of risk. Ensysce Biosciences is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Ensysce Biosciences on August 29, 2024 and sell it today you would earn a total of 22.00 from holding Ensysce Biosciences or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Ensysce Biosciences
Performance |
| Timeline |
| Seres Therapeutics |
| Ensysce Biosciences |
Seres Therapeutics and Ensysce Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Ensysce Biosciences
The main advantage of trading using opposite Seres Therapeutics and Ensysce Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Ensysce Biosciences 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 Ensysce Biosciences will offset losses from the drop in Ensysce Biosciences' long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Ensysce Biosciences vs. Eliem Therapeutics | Ensysce Biosciences vs. Scpharmaceuticals | Ensysce Biosciences vs. Milestone Pharmaceuticals | Ensysce Biosciences vs. Seres Therapeutics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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