Correlation Between Becton Dickinson and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Becton Dickinson and Cigna Corp 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 Becton Dickinson and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Becton Dickinson and and Cigna Corp, you can compare the effects of market volatilities on Becton Dickinson and Cigna Corp 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 Becton Dickinson with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Becton Dickinson and Cigna Corp.
Diversification Opportunities for Becton Dickinson and Cigna Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Becton and Cigna is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Becton Dickinson and and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Becton Dickinson 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 Becton Dickinson and are associated (or correlated) with Cigna Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cigna Corp has no effect on the direction of Becton Dickinson i.e., Becton Dickinson and Cigna Corp go up and down completely randomly.
Pair Corralation between Becton Dickinson and Cigna Corp
Considering the 90-day investment horizon Becton Dickinson and is expected to generate 0.35 times more return on investment than Cigna Corp. However, Becton Dickinson and is 2.83 times less risky than Cigna Corp. It trades about 0.2 of its potential returns per unit of risk. Cigna Corp is currently generating about -0.03 per unit of risk. If you would invest 22,717 in Becton Dickinson and on October 13, 2024 and sell it today you would earn a total of 650.00 from holding Becton Dickinson and or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Becton Dickinson and vs. Cigna Corp
Performance |
| Timeline |
| Becton Dickinson |
| Cigna Corp |
Becton Dickinson and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Becton Dickinson and Cigna Corp
The main advantage of trading using opposite Becton Dickinson and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Becton Dickinson position performs unexpectedly, Cigna Corp 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 Corp will offset losses from the drop in Cigna Corp's long position.| Becton Dickinson vs. Haemonetics | Becton Dickinson vs. The Cooper Companies, | Becton Dickinson vs. ICU Medical | Becton Dickinson vs. AngioDynamics |
| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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