Correlation Between American Well and Schrodinger

Can any of the company-specific risk be diversified away by investing in both American Well and Schrodinger 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 Schrodinger 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 Schrodinger, you can compare the effects of market volatilities on American Well and Schrodinger 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 Schrodinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Well and Schrodinger.

Diversification Opportunities for American Well and Schrodinger

-0.28

Correlation Coefficient

American Well  Schrodinger

Very good diversification

The 3 months correlation between American and Schrodinger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Well Corp and Schrodinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schrodinger 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 Schrodinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schrodinger has no effect on the direction of American Well i.e., American Well and Schrodinger go up and down completely randomly.

Pair Corralation between American Well and Schrodinger

Given the investment horizon of 90 days American Well Corp is expected to generate 1.14 times more return on investment than Schrodinger. However, American Well is 1.14 times more volatile than Schrodinger. It trades about 0.04 of its potential returns per unit of risk. Schrodinger is currently generating about -0.07 per unit of risk. If you would invest  679.00  in American Well Corp on May 6, 2025 and sell it today you would earn a total of  31.00  from holding American Well Corp or generate 4.57% return on investment over 90 days.

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

American Well Corp  vs.  Schrodinger

American Well Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Well Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, American Well may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Schrodinger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schrodinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with American Well and Schrodinger

The main advantage of trading using opposite American Well and Schrodinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Well position performs unexpectedly, Schrodinger 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 Schrodinger will offset losses from the drop in Schrodinger's long position.

The idea behind American Well Corp and Schrodinger 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.