Correlation Between Guardant Health and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Guardant Health 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 Guardant Health and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Cigna Corp, you can compare the effects of market volatilities on Guardant Health 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 Guardant Health with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Cigna Corp.
Diversification Opportunities for Guardant Health and Cigna Corp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardant and Cigna is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Guardant Health 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 Guardant Health 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 Guardant Health i.e., Guardant Health and Cigna Corp go up and down completely randomly.
Pair Corralation between Guardant Health and Cigna Corp
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.4 times more return on investment than Cigna Corp. However, Guardant Health is 1.4 times more volatile than Cigna Corp. It trades about -0.03 of its potential returns per unit of risk. Cigna Corp is currently generating about -0.32 per unit of risk. If you would invest 3,265 in Guardant Health on September 23, 2024 and sell it today you would lose (98.00) from holding Guardant Health or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardant Health vs. Cigna Corp
Performance |
| Timeline |
| Guardant Health |
| Cigna Corp |
Guardant Health and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardant Health and Cigna Corp
The main advantage of trading using opposite Guardant Health and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health 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.| Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
| Cigna Corp vs. Definitive Healthcare Corp | Cigna Corp vs. Edwards Lifesciences Corp | Cigna Corp vs. Guardant Health | Cigna Corp vs. Mednax Inc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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