Correlation Between Lendlease Global and Scilex Holding

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

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

Diversification Opportunities for Lendlease Global and Scilex Holding

0.0

Correlation Coefficient

Lendlease Global  Scilex Holding

Pay attention - limited upside

The 3 months correlation between Lendlease and Scilex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding and Lendlease Global 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 Lendlease Global Commercial 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 Lendlease Global i.e., Lendlease Global and Scilex Holding go up and down completely randomly.

Pair Corralation between Lendlease Global and Scilex Holding

If you would invest  22.00  in Scilex Holding on October 11, 2024 and sell it today you would lose (2.00) from holding Scilex Holding or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Lendlease Global Commercial  vs.  Scilex Holding

Lendlease Global Com

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendlease Global Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Lendlease Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Scilex Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Scilex Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Scilex Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lendlease Global and Scilex Holding

The main advantage of trading using opposite Lendlease Global and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease Global 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 Lendlease Global Commercial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.