Correlation Between Omnicell and American Well
Can any of the company-specific risk be diversified away by investing in both Omnicell and American Well 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 Omnicell and American Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicell and American Well Corp, you can compare the effects of market volatilities on Omnicell and American Well 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 Omnicell with a short position of American Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicell and American Well.
Diversification Opportunities for Omnicell and American Well
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omnicell and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Omnicell and American Well Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Well Corp and Omnicell 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 Omnicell are associated (or correlated) with American Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Well Corp has no effect on the direction of Omnicell i.e., Omnicell and American Well go up and down completely randomly.
Pair Corralation between Omnicell and American Well
Given the investment horizon of 90 days Omnicell is expected to under-perform the American Well. But the stock apears to be less risky and, when comparing its historical volatility, Omnicell is 1.17 times less risky than American Well. The stock trades about -0.04 of its potential returns per unit of risk. The American Well Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 900.00 in American Well Corp on September 2, 2024 and sell it today you would earn a total of 57.00 from holding American Well Corp or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omnicell vs. American Well Corp
Performance |
| Timeline |
| Omnicell |
| American Well Corp |
Omnicell and American Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnicell and American Well
The main advantage of trading using opposite Omnicell and American Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicell position performs unexpectedly, American Well 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 American Well will offset losses from the drop in American Well's long position.| Omnicell vs. HealthStream | Omnicell vs. National Research Corp | Omnicell vs. Forian Inc | Omnicell vs. Definitive Healthcare Corp |
| American Well vs. Doximity | American Well vs. Certara | American Well vs. Teladoc | American Well 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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