Correlation Between Cigna Corp and Teladoc
Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Teladoc 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 Teladoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cigna Corp and Teladoc, you can compare the effects of market volatilities on Cigna Corp and Teladoc 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 Teladoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Teladoc.
Diversification Opportunities for Cigna Corp and Teladoc
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cigna and Teladoc is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc 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 Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Cigna Corp i.e., Cigna Corp and Teladoc go up and down completely randomly.
Pair Corralation between Cigna Corp and Teladoc
Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 13.85 times less return on investment than Teladoc. But when comparing it to its historical volatility, Cigna Corp is 1.76 times less risky than Teladoc. It trades about 0.07 of its potential returns per unit of risk. Teladoc is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Teladoc on November 18, 2024 and sell it today you would earn a total of 524.00 from holding Teladoc or generate 57.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cigna Corp vs. Teladoc
Performance |
| Timeline |
| Cigna Corp |
| Teladoc |
Cigna Corp and Teladoc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cigna Corp and Teladoc
The main advantage of trading using opposite Cigna Corp and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Teladoc 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 Teladoc will offset losses from the drop in Teladoc's long position.| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
| Teladoc vs. Veeva Systems Class | Teladoc vs. 10X Genomics | Teladoc vs. GE HealthCare Technologies | Teladoc vs. Progyny |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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