Correlation Between Cigna Corp and Chemed Corp
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Chemed 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 Cigna Corp and Chemed Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Chemed Corp, you can compare the effects of market volatilities on Cigna Corp and Chemed 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 Cigna Corp with a short position of Chemed Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Chemed Corp.
Diversification Opportunities for Cigna Corp and Chemed Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cigna and Chemed is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Chemed Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemed Corp 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 Chemed Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemed Corp has no effect on the direction of Cigna Corp i.e., Cigna Corp and Chemed Corp go up and down completely randomly.
Pair Corralation between Cigna Corp and Chemed Corp
Allowing for the 90-day total investment horizon Cigna Corp is expected to under-perform the Chemed Corp. But the stock apears to be less risky and, when comparing its historical volatility, Cigna Corp is 1.02 times less risky than Chemed Corp. The stock trades about -0.17 of its potential returns per unit of risk. The Chemed Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 56,871 in Chemed Corp on September 12, 2024 and sell it today you would lose (2,116) from holding Chemed Corp or give up 3.72% 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. Chemed Corp
Performance |
| Timeline |
| Cigna Corp |
| Chemed Corp |
Cigna Corp and Chemed Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and Chemed Corp
The main advantage of trading using opposite Cigna Corp and Chemed Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Chemed 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 Chemed Corp will offset losses from the drop in Chemed Corp's long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| Chemed Corp vs. Encompass Health Corp | Chemed Corp vs. Pennant Group | Chemed Corp vs. Acadia Healthcare | Chemed Corp vs. Select Medical Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |