Correlation Between Citizens and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Citizens and Cigna 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 Citizens and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Cigna Corp, you can compare the effects of market volatilities on Citizens and Cigna 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 Citizens with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Cigna Corp.
Diversification Opportunities for Citizens and Cigna Corp
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Citizens and Cigna is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Citizens 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 Citizens are associated (or correlated) with Cigna Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cigna Corp has no effect on the direction of Citizens i.e., Citizens and Cigna Corp go up and down completely randomly.
Pair Corralation between Citizens and Cigna Corp
Considering the 90-day investment horizon Citizens is expected to under-perform the Cigna Corp. In addition to that, Citizens is 1.79 times more volatile than Cigna Corp. It trades about -0.06 of its total potential returns per unit of risk. Cigna Corp is currently generating about 0.18 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Cigna Corp
Performance |
| Timeline |
| Citizens |
| Cigna Corp |
Citizens and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Cigna Corp
The main advantage of trading using opposite Citizens and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Cigna 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 Cigna Corp will offset losses from the drop in Cigna Corp's long position.| Citizens vs. Aflac Incorporated | Citizens vs. Jackson Financial | Citizens vs. Globe Life | Citizens vs. CNO Financial Group |
| Cigna Corp vs. Elevance Health | Cigna Corp vs. UnitedHealth Group Incorporated | Cigna Corp vs. Centene Corp | Cigna Corp vs. Molina Healthcare |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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