Correlation Between Bank of America and CIGNA
Specify exactly 2 symbols:
By analyzing existing cross correlation between Bank of America and CIGNA P 325, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CIGNA.
Diversification Opportunities for Bank of America and CIGNA
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and CIGNA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America 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 Bank of America 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 Bank of America 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 Bank of America i.e., Bank of America and CIGNA go up and down completely randomly.
Pair Corralation between Bank of America and CIGNA
Assuming the 90 days trading horizon Bank of America is expected to generate 0.85 times more return on investment than CIGNA. However, Bank of America is 1.17 times less risky than CIGNA. It trades about 0.14 of its potential returns per unit of risk. CIGNA P 325 is currently generating about -0.05 per unit of risk. If you would invest 2,183 in Bank of America on September 3, 2024 and sell it today you would earn a total of 115.00 from holding Bank of America or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.75% |
| Values | Daily Returns |
Bank of America vs. CIGNA P 325
Performance |
| Timeline |
| Bank of America |
| CIGNA P 325 |
Bank of America and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CIGNA
The main advantage of trading using opposite Bank of America and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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.| Bank of America vs. Bank of America | Bank of America vs. Wells Fargo | Bank of America vs. Bank of America | Bank of America vs. China Construction Bank |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |