Correlation Between Cigna Corp and Co Diagnostics
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Co Diagnostics 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 Co Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Co Diagnostics, you can compare the effects of market volatilities on Cigna Corp and Co Diagnostics 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 Co Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Co Diagnostics.
Diversification Opportunities for Cigna Corp and Co Diagnostics
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cigna and CODX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Co Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Co Diagnostics 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 Co Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Co Diagnostics has no effect on the direction of Cigna Corp i.e., Cigna Corp and Co Diagnostics go up and down completely randomly.
Pair Corralation between Cigna Corp and Co Diagnostics
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 1.59 times less return on investment than Co Diagnostics. But when comparing it to its historical volatility, Cigna Corp is 3.99 times less risky than Co Diagnostics. It trades about 0.16 of its potential returns per unit of risk. Co Diagnostics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Co Diagnostics on November 3, 2024 and sell it today you would earn a total of 3.10 from holding Co Diagnostics or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. Co Diagnostics
Performance |
| Timeline |
| Cigna Corp |
| Co Diagnostics |
Cigna Corp and Co Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and Co Diagnostics
The main advantage of trading using opposite Cigna Corp and Co Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Co Diagnostics 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 Co Diagnostics will offset losses from the drop in Co Diagnostics' long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| Co Diagnostics vs. Heart Test Laboratories | Co Diagnostics vs. NanoVibronix | Co Diagnostics vs. Rapid Micro Biosystems | Co Diagnostics vs. Biomerica |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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