Correlation Between Anthem and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Anthem 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 Anthem and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anthem Inc and Cigna Corp, you can compare the effects of market volatilities on Anthem 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 Anthem with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anthem and Cigna Corp.
Diversification Opportunities for Anthem and Cigna Corp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anthem and Cigna is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Anthem Inc and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Anthem 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 Anthem Inc 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 Anthem i.e., Anthem and Cigna Corp go up and down completely randomly.
Pair Corralation between Anthem and Cigna Corp
If you would invest 48,258 in Anthem Inc on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Anthem Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Anthem Inc vs. Cigna Corp
Performance |
| Timeline |
| Anthem Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cigna Corp |
Anthem and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anthem and Cigna Corp
The main advantage of trading using opposite Anthem and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anthem 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.| Anthem vs. United Fire Group | Anthem vs. Brp Group | Anthem vs. Fomento Economico Mexicano | Anthem vs. Anheuser Busch Inbev |
| Cigna Corp vs. Certara | Cigna Corp vs. HealthStream | Cigna Corp vs. Evolent Health | Cigna Corp vs. Streamline Health Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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