Correlation Between Ensysce Biosciences and Compass Minerals

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

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

Diversification Opportunities for Ensysce Biosciences and Compass Minerals

0.08

Correlation Coefficient

Ensysce Biosciences  Compass Minerals

Significant diversification

The 3 months correlation between Ensysce and Compass is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ensysce Biosciences and Compass Minerals International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Minerals Int 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 Compass Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Minerals Int has no effect on the direction of Ensysce Biosciences i.e., Ensysce Biosciences and Compass Minerals go up and down completely randomly.

Pair Corralation between Ensysce Biosciences and Compass Minerals

Given the investment horizon of 90 days Ensysce Biosciences is expected to under-perform the Compass Minerals. In addition to that, Ensysce Biosciences is 1.44 times more volatile than Compass Minerals International. It trades about -0.08 of its total potential returns per unit of risk. Compass Minerals International is currently generating about 0.01 per unit of volatility. If you would invest  1,925  in Compass Minerals International on May 18, 2025 and sell it today you would lose (23.00) from holding Compass Minerals International or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ensysce Biosciences  vs.  Compass Minerals International

Ensysce Biosciences

Risk-Adjusted Performance

Weakest

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 September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Compass Minerals Int

Risk-Adjusted Performance

Weakest

Over the last 90 days Compass Minerals International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Compass Minerals is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ensysce Biosciences and Compass Minerals

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

The idea behind Ensysce Biosciences and Compass Minerals International 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.