Correlation Between Microsoft and Cigna
Can any of the company-specific risk be diversified away by investing in both Microsoft and Cigna 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 Microsoft and Cigna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Cigna, you can compare the effects of market volatilities on Microsoft and Cigna 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 Microsoft with a short position of Cigna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Cigna.
Diversification Opportunities for Microsoft and Cigna
Good diversification
The 3 months correlation between Microsoft and Cigna is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cigna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna and Microsoft 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 Microsoft are associated (or correlated) with Cigna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cigna has no effect on the direction of Microsoft i.e., Microsoft and Cigna go up and down completely randomly.
Pair Corralation between Microsoft and Cigna
Given the investment horizon of 90 days Microsoft is expected to under-perform the Cigna. In addition to that, Microsoft is 1.88 times more volatile than Cigna. It trades about -0.04 of its total potential returns per unit of risk. Cigna is currently generating about 0.19 per unit of volatility. If you would invest 46,907 in Cigna on August 28, 2024 and sell it today you would earn a total of 1,536 from holding Cigna or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Microsoft vs. Cigna
Performance |
| Timeline |
| Microsoft |
| Cigna |
Microsoft and Cigna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Cigna
The main advantage of trading using opposite Microsoft and Cigna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Cigna 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 will offset losses from the drop in Cigna's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Cigna vs. Qualicorp Consultoria e | Cigna vs. Fras le SA | Cigna vs. Western Digital | Cigna vs. Clave Indices De |
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.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |