Correlation Between BRC and CIGNA
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By analyzing existing cross correlation between BRC Inc and CIGNA P 325, you can compare the effects of market volatilities on BRC 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 BRC with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRC and CIGNA.
Diversification Opportunities for BRC and CIGNA
Good diversification
The 3 months correlation between BRC and CIGNA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BRC 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 BRC 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 BRC 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 BRC i.e., BRC and CIGNA go up and down completely randomly.
Pair Corralation between BRC and CIGNA
Given the investment horizon of 90 days BRC Inc is expected to generate 3.89 times more return on investment than CIGNA. However, BRC is 3.89 times more volatile than CIGNA P 325. It trades about 0.01 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 298.00 in BRC Inc on September 12, 2024 and sell it today you would lose (1.00) from holding BRC Inc or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
BRC Inc vs. CIGNA P 325
Performance |
| Timeline |
| BRC Inc |
| CIGNA P 325 |
BRC and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRC and CIGNA
The main advantage of trading using opposite BRC and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRC 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 BRC 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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