Correlation Between Western Union and Scilex Holding
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Scilex Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Scilex Holding, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Scilex Holding.
Diversification Opportunities for Western Union and Scilex Holding
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Scilex is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Scilex Holding go up and down completely randomly.
Pair Corralation between Western Union and Scilex Holding
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Scilex Holding. But the stock apears to be less risky and, when comparing its historical volatility, Western Union Co is 14.49 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Scilex Holding on September 3, 2024 and sell it today you would lose (7.00) from holding Scilex Holding or give up 19.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Western Union Co vs. Scilex Holding
Performance |
| Timeline |
| Western Union |
| Scilex Holding |
Western Union and Scilex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Scilex Holding
The main advantage of trading using opposite Western Union and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. American Express | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings | Western Union vs. Ally Financial |
| Scilex Holding vs. Pfizer Inc | Scilex Holding vs. Johnson Johnson | Scilex Holding vs. Highway Holdings Limited | Scilex Holding vs. QCR Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |