Correlation Between Edgewise Therapeutics and Scilex Holding
Can any of the company-specific risk be diversified away by investing in both Edgewise 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 Edgewise 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 Edgewise Therapeutics and Scilex Holding, you can compare the effects of market volatilities on Edgewise 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 Edgewise Therapeutics with a short position of Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewise Therapeutics and Scilex Holding.
Diversification Opportunities for Edgewise Therapeutics and Scilex Holding
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edgewise and Scilex is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding and Edgewise 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 Edgewise Therapeutics 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 Edgewise Therapeutics i.e., Edgewise Therapeutics and Scilex Holding go up and down completely randomly.
Pair Corralation between Edgewise Therapeutics and Scilex Holding
Given the investment horizon of 90 days Edgewise Therapeutics is expected to generate 0.34 times more return on investment than Scilex Holding. However, Edgewise Therapeutics is 2.91 times less risky than Scilex Holding. It trades about -0.02 of its potential returns per unit of risk. Scilex Holding is currently generating about -0.22 per unit of risk. If you would invest 3,357 in Edgewise Therapeutics on September 1, 2024 and sell it today you would lose (57.00) from holding Edgewise Therapeutics or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edgewise Therapeutics vs. Scilex Holding
Performance |
| Timeline |
| Edgewise Therapeutics |
| Scilex Holding |
Edgewise Therapeutics and Scilex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewise Therapeutics and Scilex Holding
The main advantage of trading using opposite Edgewise Therapeutics and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewise 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.| Edgewise Therapeutics vs. Tff Pharmaceuticals | Edgewise Therapeutics vs. Eliem Therapeutics | Edgewise Therapeutics vs. Inhibrx | Edgewise Therapeutics vs. Enliven Therapeutics |
| Scilex Holding vs. AstraZeneca PLC ADR | Scilex Holding vs. Gilead Sciences | Scilex Holding vs. Bristol Myers Squibb | Scilex Holding vs. Amgen Inc |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |