Correlation Between Cigna Corp and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and AMN Healthcare 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 AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and AMN Healthcare Services, you can compare the effects of market volatilities on Cigna Corp and AMN Healthcare 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 AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and AMN Healthcare.
Diversification Opportunities for Cigna Corp and AMN Healthcare
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cigna and AMN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and AMN Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMN Healthcare Services 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 AMN Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMN Healthcare Services has no effect on the direction of Cigna Corp i.e., Cigna Corp and AMN Healthcare go up and down completely randomly.
Pair Corralation between Cigna Corp and AMN Healthcare
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 0.26 times more return on investment than AMN Healthcare. However, Cigna Corp is 3.85 times less risky than AMN Healthcare. It trades about 0.18 of its potential returns per unit of risk. AMN Healthcare Services is currently generating about -0.2 per unit of risk. If you would invest 31,289 in Cigna Corp on August 31, 2024 and sell it today you would earn a total of 2,361 from holding Cigna Corp or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. AMN Healthcare Services
Performance |
| Timeline |
| Cigna Corp |
| AMN Healthcare Services |
Cigna Corp and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and AMN Healthcare
The main advantage of trading using opposite Cigna Corp and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, AMN Healthcare 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 AMN Healthcare will offset losses from the drop in AMN Healthcare's long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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