Correlation Between American Express and CIGNA
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By analyzing existing cross correlation between American Express and CIGNA P, you can compare the effects of market volatilities on American Express and CIGNA 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 Express with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and CIGNA.
Diversification Opportunities for American Express and CIGNA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and CIGNA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding American Express and CIGNA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P and American Express 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 Express are associated (or correlated) with CIGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIGNA P has no effect on the direction of American Express i.e., American Express and CIGNA go up and down completely randomly.
Pair Corralation between American Express and CIGNA
Considering the 90-day investment horizon American Express is expected to generate 1.71 times more return on investment than CIGNA. However, American Express is 1.71 times more volatile than CIGNA P. It trades about 0.11 of its potential returns per unit of risk. CIGNA P is currently generating about -0.01 per unit of risk. If you would invest 14,674 in American Express on August 28, 2024 and sell it today you would earn a total of 15,847 from holding American Express or generate 107.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
American Express vs. CIGNA P
Performance |
| Timeline |
| American Express |
| CIGNA P |
American Express and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and CIGNA
The main advantage of trading using opposite American Express and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, CIGNA 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 CIGNA will offset losses from the drop in CIGNA's long position.| American Express vs. Orix Corp Ads | American Express vs. Medallion Financial Corp | American Express vs. Oportun Financial Corp | American Express vs. SLM Corp Pb |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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