Correlation Between Ontrak and American Well
Can any of the company-specific risk be diversified away by investing in both Ontrak 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 Ontrak and American Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontrak Inc and American Well Corp, you can compare the effects of market volatilities on Ontrak 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 Ontrak with a short position of American Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontrak and American Well.
Diversification Opportunities for Ontrak and American Well
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ontrak and American is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ontrak Inc 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 Ontrak 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 Ontrak Inc 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 Ontrak i.e., Ontrak and American Well go up and down completely randomly.
Pair Corralation between Ontrak and American Well
Given the investment horizon of 90 days Ontrak Inc is expected to generate 1.92 times more return on investment than American Well. However, Ontrak is 1.92 times more volatile than American Well Corp. It trades about -0.02 of its potential returns per unit of risk. American Well Corp is currently generating about -0.04 per unit of risk. If you would invest 3,462 in Ontrak Inc on September 2, 2024 and sell it today you would lose (3,282) from holding Ontrak Inc or give up 94.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontrak Inc vs. American Well Corp
Performance |
| Timeline |
| Ontrak Inc |
| American Well Corp |
Ontrak and American Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontrak and American Well
The main advantage of trading using opposite Ontrak and American Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontrak 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.| Ontrak vs. American Well Corp | Ontrak vs. Root Inc | Ontrak vs. Goodrx Holdings | Ontrak vs. Bigcommerce Holdings |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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