Correlation Between CIGNA and Chemours
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By analyzing existing cross correlation between CIGNA P and Chemours Co, you can compare the effects of market volatilities on CIGNA and Chemours 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 CIGNA with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIGNA and Chemours.
Diversification Opportunities for CIGNA and Chemours
Very good diversification
The 3 months correlation between CIGNA and Chemours is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CIGNA P and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and CIGNA 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 CIGNA P are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of CIGNA i.e., CIGNA and Chemours go up and down completely randomly.
Pair Corralation between CIGNA and Chemours
Assuming the 90 days trading horizon CIGNA P is expected to under-perform the Chemours. But the bond apears to be less risky and, when comparing its historical volatility, CIGNA P is 1.37 times less risky than Chemours. The bond trades about -0.14 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,031 in Chemours Co on September 3, 2024 and sell it today you would earn a total of 143.00 from holding Chemours Co or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
CIGNA P vs. Chemours Co
Performance |
| Timeline |
| CIGNA P |
| Chemours |
CIGNA and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIGNA and Chemours
The main advantage of trading using opposite CIGNA and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIGNA position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.The idea behind CIGNA P and Chemours Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chemours vs. SPACE | Chemours vs. Bayview Acquisition Corp | Chemours vs. T Rowe Price | Chemours vs. Ampleforth |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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