Correlation Between Cigna Corp and Edwards Lifesciences

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Edwards Lifesciences 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 Edwards Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Edwards Lifesciences Corp, you can compare the effects of market volatilities on Cigna Corp and Edwards Lifesciences 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 Edwards Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Edwards Lifesciences.

Diversification Opportunities for Cigna Corp and Edwards Lifesciences

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cigna and Edwards is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Edwards Lifesciences Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edwards Lifesciences 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 Edwards Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edwards Lifesciences Corp has no effect on the direction of Cigna Corp i.e., Cigna Corp and Edwards Lifesciences go up and down completely randomly.

Pair Corralation between Cigna Corp and Edwards Lifesciences

Allowing for the 90-day total investment horizon Cigna Corp is expected to under-perform the Edwards Lifesciences. In addition to that, Cigna Corp is 1.07 times more volatile than Edwards Lifesciences Corp. It trades about -0.48 of its total potential returns per unit of risk. Edwards Lifesciences Corp is currently generating about 0.17 per unit of volatility. If you would invest  6,989  in Edwards Lifesciences Corp on September 18, 2024 and sell it today you would earn a total of  423.00  from holding Edwards Lifesciences Corp or generate 6.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cigna Corp  vs.  Edwards Lifesciences Corp

 Performance 
       Timeline  
Cigna Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cigna Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Edwards Lifesciences Corp 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Edwards Lifesciences Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Edwards Lifesciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cigna Corp and Edwards Lifesciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cigna Corp and Edwards Lifesciences

The main advantage of trading using opposite Cigna Corp and Edwards Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Edwards Lifesciences 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 Edwards Lifesciences will offset losses from the drop in Edwards Lifesciences' long position.
The idea behind Cigna Corp and Edwards Lifesciences Corp 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like