Correlation Between Cigna Corp and Laboratory
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Laboratory 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 Laboratory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Laboratory of, you can compare the effects of market volatilities on Cigna Corp and Laboratory 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 Laboratory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Laboratory.
Diversification Opportunities for Cigna Corp and Laboratory
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cigna and Laboratory is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Laboratory of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratory 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 Laboratory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratory has no effect on the direction of Cigna Corp i.e., Cigna Corp and Laboratory go up and down completely randomly.
Pair Corralation between Cigna Corp and Laboratory
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 1.58 times more return on investment than Laboratory. However, Cigna Corp is 1.58 times more volatile than Laboratory of. It trades about 0.18 of its potential returns per unit of risk. Laboratory of is currently generating about 0.23 per unit of risk. If you would invest 31,481 in Cigna Corp on September 1, 2024 and sell it today you would earn a total of 2,299 from holding Cigna Corp or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. Laboratory of
Performance |
| Timeline |
| Cigna Corp |
| Laboratory |
Cigna Corp and Laboratory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and Laboratory
The main advantage of trading using opposite Cigna Corp and Laboratory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Laboratory 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 Laboratory will offset losses from the drop in Laboratory's long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| Laboratory vs. Humana Inc | Laboratory vs. Cigna Corp | Laboratory vs. Elevance Health | Laboratory vs. Centene 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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