Correlation Between MMTEC and Ensysce Biosciences

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

By analyzing existing cross correlation between MMTEC Inc and Ensysce Biosciences, you can compare the effects of market volatilities on MMTEC 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 MMTEC with a short position of Ensysce Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMTEC and Ensysce Biosciences.

Diversification Opportunities for MMTEC and Ensysce Biosciences

0.43

Correlation Coefficient

MMTEC  Ensysce Biosciences

Very weak diversification

The 3 months correlation between MMTEC and Ensysce is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MMTEC Inc and Ensysce Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensysce Biosciences and MMTEC 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 MMTEC Inc 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 MMTEC i.e., MMTEC and Ensysce Biosciences go up and down completely randomly.

Pair Corralation between MMTEC and Ensysce Biosciences

Considering the 90-day investment horizon MMTEC Inc is expected to under-perform the Ensysce Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, MMTEC Inc is 1.18 times less risky than Ensysce Biosciences. The stock trades about -0.1 of its potential returns per unit of risk. The Ensysce Biosciences is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  247.00  in Ensysce Biosciences on May 3, 2025 and sell it today you would lose (42.00) from holding Ensysce Biosciences or give up 17.0% of portfolio value over 90 days.

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

MMTEC Inc  vs.  Ensysce Biosciences

MMTEC Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days MMTEC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

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 latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with MMTEC and Ensysce Biosciences

The main advantage of trading using opposite MMTEC and Ensysce Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMTEC 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.

The idea behind MMTEC Inc and Ensysce Biosciences 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.