Correlation Between American Coastal and Omnicell

Can any of the company-specific risk be diversified away by investing in both American Coastal 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 Coastal and Omnicell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Coastal Insurance and Omnicell, you can compare the effects of market volatilities on American Coastal 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 Coastal with a short position of Omnicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Coastal and Omnicell.

Diversification Opportunities for American Coastal and Omnicell

0.01

Correlation Coefficient

American Coastal  Omnicell

Significant diversification

The 3 months correlation between American and Omnicell is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding American Coastal Insurance and Omnicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicell and American Coastal 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 Coastal Insurance 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 Coastal i.e., American Coastal and Omnicell go up and down completely randomly.

Pair Corralation between American Coastal and Omnicell

Given the investment horizon of 90 days American Coastal Insurance is expected to under-perform the Omnicell. But the stock apears to be less risky and, when comparing its historical volatility, American Coastal Insurance is 1.53 times less risky than Omnicell. The stock trades about -0.1 of its potential returns per unit of risk. The Omnicell is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,049  in Omnicell on May 5, 2025 and sell it today you would lose (73.00) from holding Omnicell or give up 2.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American Coastal Insurance  vs.  Omnicell

American Coastal Ins

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Coastal Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Omnicell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omnicell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Omnicell is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with American Coastal and Omnicell

The main advantage of trading using opposite American Coastal and Omnicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Coastal 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.

The idea behind American Coastal Insurance and Omnicell pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.