Correlation Between Scilex Holding and Scilex Holding

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

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

Diversification Opportunities for Scilex Holding and Scilex Holding

0.78

Correlation Coefficient

Scilex Holding  Scilex Holding

Poor diversification

The 3 months correlation between Scilex and Scilex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Scilex Holding and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding and Scilex Holding 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 Scilex Holding 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 Scilex Holding i.e., Scilex Holding and Scilex Holding go up and down completely randomly.

Pair Corralation between Scilex Holding and Scilex Holding

Given the investment horizon of 90 days Scilex Holding is expected to under-perform the Scilex Holding. But the stock apears to be less risky and, when comparing its historical volatility, Scilex Holding is 3.21 times less risky than Scilex Holding. The stock trades about -0.1 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  22.00  in Scilex Holding on December 20, 2024 and sell it today you would lose (12.50) from holding Scilex Holding or give up 56.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.92%
Values	Daily Returns

Scilex Holding  vs.  Scilex Holding

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company 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 Scilex Holding and Scilex Holding

The main advantage of trading using opposite Scilex Holding and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scilex Holding 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 Scilex Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.