Correlation Between BriaCell Therapeutics and Scilex Holding

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

By analyzing existing cross correlation between BriaCell Therapeutics Corp and Scilex Holding, you can compare the effects of market volatilities on BriaCell Therapeutics and Scilex Holding 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 BriaCell Therapeutics with a short position of Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BriaCell Therapeutics and Scilex Holding.

Diversification Opportunities for BriaCell Therapeutics and Scilex Holding

0.71

Correlation Coefficient

BriaCell Therapeutics  Scilex Holding

Poor diversification

The 3 months correlation between BriaCell and Scilex is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BriaCell Therapeutics Corp and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding and BriaCell 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 BriaCell Therapeutics Corp are associated (or correlated) with Scilex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scilex Holding has no effect on the direction of BriaCell Therapeutics i.e., BriaCell Therapeutics and Scilex Holding go up and down completely randomly.

Pair Corralation between BriaCell Therapeutics and Scilex Holding

Assuming the 90 days horizon BriaCell Therapeutics Corp is expected to under-perform the Scilex Holding. But the stock apears to be less risky and, when comparing its historical volatility, BriaCell Therapeutics Corp is 1.6 times less risky than Scilex Holding. The stock trades about -0.15 of its potential returns per unit of risk. The Scilex Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Scilex Holding on December 30, 2024 and sell it today you would lose (10.00) from holding Scilex Holding or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.14%
Values	Daily Returns

BriaCell Therapeutics Corp  vs.  Scilex Holding

BriaCell Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days BriaCell Therapeutics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Scilex Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scilex Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Scilex Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BriaCell Therapeutics and Scilex Holding

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

The idea behind BriaCell Therapeutics Corp and Scilex Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.