Correlation Between Fednat Holding and Cigna Corp
Can any of the company-specific risk be diversified away by investing in both Fednat Holding 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 Fednat Holding and Cigna Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fednat Holding Co and Cigna Corp, you can compare the effects of market volatilities on Fednat Holding 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 Fednat Holding with a short position of Cigna Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fednat Holding and Cigna Corp.
Diversification Opportunities for Fednat Holding and Cigna Corp
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fednat and Cigna is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fednat Holding Co and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Fednat Holding 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 Fednat Holding Co 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 Fednat Holding i.e., Fednat Holding and Cigna Corp go up and down completely randomly.
Pair Corralation between Fednat Holding and Cigna Corp
If you would invest 0.16 in Fednat Holding Co on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Fednat Holding Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Fednat Holding Co vs. Cigna Corp
Performance |
| Timeline |
| Fednat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cigna Corp |
Fednat Holding and Cigna Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fednat Holding and Cigna Corp
The main advantage of trading using opposite Fednat Holding and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fednat Holding 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.| Fednat Holding vs. Asure Software | Fednat Holding vs. Anheuser Busch Inbev | Fednat Holding vs. DHI Group | Fednat Holding vs. Bm Technologies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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