Correlation Between Ensysce Biosciences and Azure Power

Can any of the company-specific risk be diversified away by investing in both Ensysce Biosciences and Azure Power 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 Azure Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ensysce Biosciences and Azure Power Global, you can compare the effects of market volatilities on Ensysce Biosciences and Azure Power 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 Azure Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensysce Biosciences and Azure Power.

Diversification Opportunities for Ensysce Biosciences and Azure Power

0.16

Correlation Coefficient

Ensysce Biosciences  Azure Power

Average diversification

The 3 months correlation between Ensysce and Azure is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Azure Power Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Power Global 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 Azure Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Power Global has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Azure Power go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Azure Power

Given the investment horizon of 90 days Ensysce Biosciences is expected to under-perform the Azure Power. But the stock apears to be less risky and, when comparing its historical volatility, Ensysce Biosciences is 3.97 times less risky than Azure Power. The stock trades about -0.07 of its potential returns per unit of risk. The Azure Power Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Azure Power Global on April 30, 2025 and sell it today you would earn a total of  25.00  from holding Azure Power Global or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Ensysce Biosciences  vs.  Azure Power Global

Ensysce Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ensysce Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Azure Power Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Power Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Azure Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ensysce Biosciences and Azure Power

The main advantage of trading using opposite Ensysce Biosciences and Azure Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensysce Biosciences position performs unexpectedly, Azure Power 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 Azure Power will offset losses from the drop in Azure Power's long position.

The idea behind Ensysce Biosciences and Azure Power Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.