Correlation Between American Well and Veeva Systems
Can any of the company-specific risk be diversified away by investing in both American Well and Veeva Systems 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 Veeva Systems 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 Veeva Systems Class, you can compare the effects of market volatilities on American Well and Veeva Systems 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 Veeva Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Well and Veeva Systems.
Diversification Opportunities for American Well and Veeva Systems
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Veeva is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Well Corp and Veeva Systems Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeva Systems Class 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 Veeva Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeva Systems Class has no effect on the direction of American Well i.e., American Well and Veeva Systems go up and down completely randomly.
Pair Corralation between American Well and Veeva Systems
Given the investment horizon of 90 days American Well Corp is expected to generate 4.47 times more return on investment than Veeva Systems. However, American Well is 4.47 times more volatile than Veeva Systems Class. It trades about 0.19 of its potential returns per unit of risk. Veeva Systems Class is currently generating about -0.05 per unit of risk. If you would invest 784.00 in American Well Corp on October 20, 2024 and sell it today you would earn a total of 171.00 from holding American Well Corp or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Well Corp vs. Veeva Systems Class
Performance |
| Timeline |
| American Well Corp |
| Veeva Systems Class |
American Well and Veeva Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Well and Veeva Systems
The main advantage of trading using opposite American Well and Veeva Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Well position performs unexpectedly, Veeva Systems 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 Veeva Systems will offset losses from the drop in Veeva Systems' long position.| American Well vs. Doximity | American Well vs. Certara | American Well vs. Teladoc | American Well vs. Definitive Healthcare Corp |
| Veeva Systems vs. Progyny | Veeva Systems vs. Teladoc | Veeva Systems vs. Goodrx Holdings | Veeva Systems vs. 10X Genomics |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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