Correlation Between Cigna Corp and Adicet Bio
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Adicet Bio 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 Cigna Corp and Adicet Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Adicet Bio, you can compare the effects of market volatilities on Cigna Corp and Adicet Bio 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 Cigna Corp with a short position of Adicet Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Adicet Bio.
Diversification Opportunities for Cigna Corp and Adicet Bio
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cigna and Adicet is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Adicet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adicet Bio and Cigna Corp 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 Cigna Corp are associated (or correlated) with Adicet Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adicet Bio has no effect on the direction of Cigna Corp i.e., Cigna Corp and Adicet Bio go up and down completely randomly.
Pair Corralation between Cigna Corp and Adicet Bio
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 0.33 times more return on investment than Adicet Bio. However, Cigna Corp is 3.04 times less risky than Adicet Bio. It trades about 0.0 of its potential returns per unit of risk. Adicet Bio is currently generating about -0.06 per unit of risk. If you would invest 30,198 in Cigna Corp on November 9, 2024 and sell it today you would lose (1,475) from holding Cigna Corp or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. Adicet Bio
Performance |
| Timeline |
| Cigna Corp |
| Adicet Bio |
Cigna Corp and Adicet Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and Adicet Bio
The main advantage of trading using opposite Cigna Corp and Adicet Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Adicet Bio 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 Adicet Bio will offset losses from the drop in Adicet Bio's long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| Adicet Bio vs. Edgewise Therapeutics | Adicet Bio vs. Cullinan Oncology LLC | Adicet Bio vs. Vor Biopharma | Adicet Bio vs. Tenaya Therapeutics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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