Correlation Between American Well and Omnicell
Can any of the company-specific risk be diversified away by investing in both American Well and Omnicell 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 Omnicell 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 Omnicell, you can compare the effects of market volatilities on American Well and Omnicell 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 Omnicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Well and Omnicell.
Diversification Opportunities for American Well and Omnicell
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Omnicell is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding American Well Corp and Omnicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicell 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 Omnicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicell has no effect on the direction of American Well i.e., American Well and Omnicell go up and down completely randomly.
Pair Corralation between American Well and Omnicell
Given the investment horizon of 90 days American Well is expected to generate 1.33 times less return on investment than Omnicell. In addition to that, American Well is 1.48 times more volatile than Omnicell. It trades about 0.05 of its total potential returns per unit of risk. Omnicell is currently generating about 0.09 per unit of volatility. If you would invest 3,053 in Omnicell on September 3, 2024 and sell it today you would earn a total of 1,708 from holding Omnicell or generate 55.94% 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. Omnicell
Performance |
| Timeline |
| American Well Corp |
| Omnicell |
American Well and Omnicell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Well and Omnicell
The main advantage of trading using opposite American Well and Omnicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Well position performs unexpectedly, Omnicell 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 Omnicell will offset losses from the drop in Omnicell's long position.| American Well vs. Doximity | American Well vs. Certara | American Well vs. Teladoc | American Well vs. Definitive Healthcare Corp |
| Omnicell vs. HealthStream | Omnicell vs. National Research Corp | Omnicell vs. Forian Inc | Omnicell vs. Definitive Healthcare Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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