Correlation Between Valens and CIGNA
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By analyzing existing cross correlation between Valens and CIGNA P, you can compare the effects of market volatilities on Valens 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 Valens with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and CIGNA.
Diversification Opportunities for Valens and CIGNA
Very weak diversification
The 3 months correlation between Valens and CIGNA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Valens and CIGNA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P and Valens 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 Valens 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 has no effect on the direction of Valens i.e., Valens and CIGNA go up and down completely randomly.
Pair Corralation between Valens and CIGNA
Considering the 90-day investment horizon Valens is expected to under-perform the CIGNA. In addition to that, Valens is 3.77 times more volatile than CIGNA P. It trades about -0.04 of its total potential returns per unit of risk. CIGNA P is currently generating about -0.02 per unit of volatility. If you would invest 9,833 in CIGNA P on September 3, 2024 and sell it today you would lose (1,017) from holding CIGNA P or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Valens vs. CIGNA P
Performance |
| Timeline |
| Valens |
| CIGNA P |
Valens and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and CIGNA
The main advantage of trading using opposite Valens and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens 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.| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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