Correlation Between American Well and 10X Genomics
Can any of the company-specific risk be diversified away by investing in both American Well and 10X Genomics 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 10X Genomics 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 10X Genomics, you can compare the effects of market volatilities on American Well and 10X Genomics 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 10X Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Well and 10X Genomics.
Diversification Opportunities for American Well and 10X Genomics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and 10X is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Well Corp and 10X Genomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 10X Genomics 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 10X Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 10X Genomics has no effect on the direction of American Well i.e., American Well and 10X Genomics go up and down completely randomly.
Pair Corralation between American Well and 10X Genomics
Given the investment horizon of 90 days American Well is expected to generate 2.7 times less return on investment than 10X Genomics. In addition to that, American Well is 1.39 times more volatile than 10X Genomics. It trades about 0.0 of its total potential returns per unit of risk. 10X Genomics is currently generating about 0.01 per unit of volatility. If you would invest 1,537 in 10X Genomics on October 20, 2024 and sell it today you would lose (29.00) from holding 10X Genomics or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Well Corp vs. 10X Genomics
Performance |
| Timeline |
| American Well Corp |
| 10X Genomics |
American Well and 10X Genomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Well and 10X Genomics
The main advantage of trading using opposite American Well and 10X Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Well position performs unexpectedly, 10X Genomics 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 10X Genomics will offset losses from the drop in 10X Genomics' long position.| American Well vs. Doximity | American Well vs. Certara | American Well vs. Teladoc | American Well vs. Definitive Healthcare Corp |
| 10X Genomics vs. Twist Bioscience Corp | 10X Genomics vs. Fate Therapeutics | 10X Genomics vs. Beam Therapeutics | 10X Genomics vs. Veracyte |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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