Correlation Between Scilex Holding and OmniAb

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

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

Diversification Opportunities for Scilex Holding and OmniAb

-0.66

Correlation Coefficient

Scilex Holding  OmniAb

Excellent diversification

The 3 months correlation between Scilex and OmniAb is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Scilex Holding and OmniAb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OmniAb Inc 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 OmniAb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OmniAb Inc has no effect on the direction of Scilex Holding i.e., Scilex Holding and OmniAb go up and down completely randomly.

Pair Corralation between Scilex Holding and OmniAb

Assuming the 90 days horizon Scilex Holding is expected to generate 7.06 times less return on investment than OmniAb. In addition to that, Scilex Holding is 1.01 times more volatile than OmniAb Inc. It trades about 0.01 of its total potential returns per unit of risk. OmniAb Inc is currently generating about 0.06 per unit of volatility. If you would invest  34.00  in OmniAb Inc on December 29, 2024 and sell it today you would lose (3.00) from holding OmniAb Inc or give up 8.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	67.24%
Values	Daily Returns

Scilex Holding  vs.  OmniAb Inc

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 inconsistent basic indicators, Scilex Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

OmniAb Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OmniAb Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, OmniAb showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scilex Holding and OmniAb

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

The idea behind Scilex Holding and OmniAb Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.