Correlation Between BCE and CIGNA
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By analyzing existing cross correlation between BCE Inc and CIGNA P 325, you can compare the effects of market volatilities on BCE 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 BCE with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and CIGNA.
Diversification Opportunities for BCE and CIGNA
Good diversification
The 3 months correlation between BCE and CIGNA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and CIGNA P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 325 and BCE 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 BCE Inc 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 325 has no effect on the direction of BCE i.e., BCE and CIGNA go up and down completely randomly.
Pair Corralation between BCE and CIGNA
Considering the 90-day investment horizon BCE Inc is expected to generate 1.47 times more return on investment than CIGNA. However, BCE is 1.47 times more volatile than CIGNA P 325. It trades about -0.22 of its potential returns per unit of risk. CIGNA P 325 is currently generating about -0.34 per unit of risk. If you would invest 2,785 in BCE Inc on September 12, 2024 and sell it today you would lose (139.00) from holding BCE Inc or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
BCE Inc vs. CIGNA P 325
Performance |
| Timeline |
| BCE Inc |
| CIGNA P 325 |
BCE and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and CIGNA
The main advantage of trading using opposite BCE and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.The idea behind BCE Inc and CIGNA P 325 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.| CIGNA vs. Century Aluminum | CIGNA vs. Grupo Simec SAB | CIGNA vs. Summit Environmental | CIGNA vs. Algoma Steel Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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