Correlation Between American Well and Bigcommerce Holdings
Can any of the company-specific risk be diversified away by investing in both American Well and Bigcommerce Holdings 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 American Well and Bigcommerce Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Well Corp and Bigcommerce Holdings, you can compare the effects of market volatilities on American Well and Bigcommerce Holdings 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 American Well with a short position of Bigcommerce Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Well and Bigcommerce Holdings.
Diversification Opportunities for American Well and Bigcommerce Holdings
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Bigcommerce is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding American Well Corp and Bigcommerce Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bigcommerce Holdings and American Well 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 American Well Corp are associated (or correlated) with Bigcommerce Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bigcommerce Holdings has no effect on the direction of American Well i.e., American Well and Bigcommerce Holdings go up and down completely randomly.
Pair Corralation between American Well and Bigcommerce Holdings
Given the investment horizon of 90 days American Well Corp is expected to generate 2.14 times more return on investment than Bigcommerce Holdings. However, American Well is 2.14 times more volatile than Bigcommerce Holdings. It trades about 0.06 of its potential returns per unit of risk. Bigcommerce Holdings is currently generating about -0.02 per unit of risk. If you would invest 780.00 in American Well Corp on September 2, 2024 and sell it today you would earn a total of 177.00 from holding American Well Corp or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Well Corp vs. Bigcommerce Holdings
Performance |
| Timeline |
| American Well Corp |
| Bigcommerce Holdings |
American Well and Bigcommerce Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Well and Bigcommerce Holdings
The main advantage of trading using opposite American Well and Bigcommerce Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Well position performs unexpectedly, Bigcommerce Holdings 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 Bigcommerce Holdings will offset losses from the drop in Bigcommerce Holdings' long position.| American Well vs. Doximity | American Well vs. Certara | American Well vs. Teladoc | American Well vs. Definitive Healthcare Corp |
| Bigcommerce Holdings vs. nCino Inc | Bigcommerce Holdings vs. ZoomInfo Technologies | Bigcommerce Holdings vs. Gitlab Inc | Bigcommerce Holdings vs. MondayCom |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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