Correlation Between Quest Diagnostics and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Quest Diagnostics 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 Quest Diagnostics and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quest Diagnostics Incorporated and Cigna Corp, you can compare the effects of market volatilities on Quest Diagnostics 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 Quest Diagnostics with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quest Diagnostics and Cigna Corp.
Diversification Opportunities for Quest Diagnostics and Cigna Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Quest and Cigna is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Quest Diagnostics Incorporated and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Quest Diagnostics 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 Quest Diagnostics Incorporated 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 Quest Diagnostics i.e., Quest Diagnostics and Cigna Corp go up and down completely randomly.
Pair Corralation between Quest Diagnostics and Cigna Corp
Considering the 90-day investment horizon Quest Diagnostics Incorporated is expected to under-perform the Cigna Corp. But the stock apears to be less risky and, when comparing its historical volatility, Quest Diagnostics Incorporated is 2.0 times less risky than Cigna Corp. The stock trades about -0.13 of its potential returns per unit of risk. The Cigna Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 28,296 in Cigna Corp on October 13, 2024 and sell it today you would lose (397.00) from holding Cigna Corp or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quest Diagnostics Incorporated vs. Cigna Corp
Performance |
| Timeline |
| Quest Diagnostics |
| Cigna Corp |
Quest Diagnostics and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quest Diagnostics and Cigna Corp
The main advantage of trading using opposite Quest Diagnostics and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quest Diagnostics 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.| Quest Diagnostics vs. IQVIA Holdings | Quest Diagnostics vs. Mettler Toledo International | Quest Diagnostics vs. Twist Bioscience Corp | Quest Diagnostics vs. Waters |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |