Correlation Between Brookfield Wealth and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Brookfield Wealth 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 Brookfield Wealth and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Wealth Solutions and Cigna Corp, you can compare the effects of market volatilities on Brookfield Wealth 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 Brookfield Wealth with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Wealth and Cigna Corp.
Diversification Opportunities for Brookfield Wealth and Cigna Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and Cigna is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Wealth Solutions and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Brookfield Wealth 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 Brookfield Wealth Solutions 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 Brookfield Wealth i.e., Brookfield Wealth and Cigna Corp go up and down completely randomly.
Pair Corralation between Brookfield Wealth and Cigna Corp
Considering the 90-day investment horizon Brookfield Wealth Solutions is expected to generate 0.74 times more return on investment than Cigna Corp. However, Brookfield Wealth Solutions is 1.34 times less risky than Cigna Corp. It trades about 0.48 of its potential returns per unit of risk. Cigna Corp is currently generating about 0.18 per unit of risk. If you would invest 5,307 in Brookfield Wealth Solutions on September 1, 2024 and sell it today you would earn a total of 832.00 from holding Brookfield Wealth Solutions or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Wealth Solutions vs. Cigna Corp
Performance |
| Timeline |
| Brookfield Wealth |
| Cigna Corp |
Brookfield Wealth and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Wealth and Cigna Corp
The main advantage of trading using opposite Brookfield Wealth and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Wealth 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.| Brookfield Wealth vs. Planet Fitness | Brookfield Wealth vs. MI Homes | Brookfield Wealth vs. Life Time Group | Brookfield Wealth vs. Franklin Street Properties |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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