Correlation Between Scilex Holding and Phio Pharmaceuticals

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

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

Diversification Opportunities for Scilex Holding and Phio Pharmaceuticals

0.53

Correlation Coefficient

Scilex Holding  Phio Pharmaceuticals

Very weak diversification

The 3 months correlation between Scilex and Phio is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Scilex Holding and Phio Pharmaceuticals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phio Pharmaceuticals Corp 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 Phio Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phio Pharmaceuticals Corp has no effect on the direction of Scilex Holding i.e., Scilex Holding and Phio Pharmaceuticals go up and down completely randomly.

Pair Corralation between Scilex Holding and Phio Pharmaceuticals

Given the investment horizon of 90 days Scilex Holding is expected to generate 1.49 times more return on investment than Phio Pharmaceuticals. However, Scilex Holding is 1.49 times more volatile than Phio Pharmaceuticals Corp. It trades about 0.19 of its potential returns per unit of risk. Phio Pharmaceuticals Corp is currently generating about 0.09 per unit of risk. If you would invest  543.00  in Scilex Holding on May 3, 2025 and sell it today you would earn a total of  763.00  from holding Scilex Holding or generate 140.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Scilex Holding  vs.  Phio Pharmaceuticals Corp

Scilex Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scilex Holding are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Scilex Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Phio Pharmaceuticals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phio Pharmaceuticals Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Phio Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scilex Holding and Phio Pharmaceuticals

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

The idea behind Scilex Holding and Phio Pharmaceuticals Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.