Correlation Between Scilex Holding and Amgen
Can any of the company-specific risk be diversified away by investing in both Scilex Holding and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scilex Holding and Amgen Inc, you can compare the effects of market volatilities on Scilex Holding and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scilex Holding and Amgen.
Diversification Opportunities for Scilex Holding and Amgen
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scilex and Amgen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Scilex Holding and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Scilex Holding i.e., Scilex Holding and Amgen go up and down completely randomly.
Pair Corralation between Scilex Holding and Amgen
Given the investment horizon of 90 days Scilex Holding is expected to under-perform the Amgen. In addition to that, Scilex Holding is 3.26 times more volatile than Amgen Inc. It trades about -0.32 of its total potential returns per unit of risk. Amgen Inc is currently generating about -0.12 per unit of volatility. If you would invest 31,319 in Amgen Inc on August 25, 2024 and sell it today you would lose (1,866) from holding Amgen Inc or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scilex Holding vs. Amgen Inc
Performance |
| Timeline |
| Scilex Holding |
| Amgen Inc |
Scilex Holding and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scilex Holding and Amgen
The main advantage of trading using opposite Scilex Holding and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scilex Holding position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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