Correlation Between Pinterest and CIGNA
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By analyzing existing cross correlation between Pinterest and CIGNA P 325, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and CIGNA.
Diversification Opportunities for Pinterest and CIGNA
Significant diversification
The 3 months correlation between Pinterest and CIGNA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and CIGNA P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 325 and Pinterest 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 Pinterest 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 P 325 has no effect on the direction of Pinterest i.e., Pinterest and CIGNA go up and down completely randomly.
Pair Corralation between Pinterest and CIGNA
Given the investment horizon of 90 days Pinterest is expected to generate 5.13 times more return on investment than CIGNA. However, Pinterest is 5.13 times more volatile than CIGNA P 325. It trades about -0.02 of its potential returns per unit of risk. CIGNA P 325 is currently generating about -0.21 per unit of risk. If you would invest 3,228 in Pinterest on September 4, 2024 and sell it today you would lose (94.00) from holding Pinterest or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Pinterest vs. CIGNA P 325
Performance |
| Timeline |
| CIGNA P 325 |
Pinterest and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and CIGNA
The main advantage of trading using opposite Pinterest and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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