Correlation Between HCA Holdings and American Well

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

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

Diversification Opportunities for HCA Holdings and American Well

-0.27

Correlation Coefficient

HCA Holdings  American Well

Very good diversification

The 3 months correlation between HCA and American is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding HCA Holdings 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 HCA Holdings 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 HCA Holdings 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 HCA Holdings i.e., HCA Holdings and American Well go up and down completely randomly.

Pair Corralation between HCA Holdings and American Well

Considering the 90-day investment horizon HCA Holdings is expected to under-perform the American Well. But the etf apears to be less risky and, when comparing its historical volatility, HCA Holdings is 3.28 times less risky than American Well. The etf trades about -0.1 of its potential returns per unit of risk. The American Well Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  816.00  in American Well Corp on May 7, 2025 and sell it today you would earn a total of  32.00  from holding American Well Corp or generate 3.92% return on investment over 90 days.

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

HCA Holdings  vs.  American Well Corp

HCA Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HCA Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, HCA Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Well Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in American Well Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, American Well disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HCA Holdings and American Well

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

The idea behind HCA Holdings and American Well Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.