Correlation Between CVS Health and Cigna

Analyzing existing cross correlation between CVS Health Corporation and Cigna Corporation. You can compare the effects of market volatilities on CVS Health 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 CVS Health with a short position of Cigna. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Cigna.

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Diversification Opportunities for CVS Health and Cigna

CVS Health Corp. diversification synergy
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Good diversification

The 3 months correlation between CVS Health and Cigna is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health Corp. and Cigna Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Cigna and CVS Health 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 CVS Health Corporation 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 has no effect on the direction of CVS Health i.e. CVS Health and Cigna go up and down completely randomly.

Pair Corralation between CVS Health and Cigna

Considering 30-days investment horizon, CVS Health Corporation is expected to under-perform the Cigna. But the stock apears to be less risky and, when comparing its historical volatility, CVS Health Corporation is 1.35 times less risky than Cigna. The stock trades about -0.05 of its potential returns per unit of risk. The Cigna Corporation is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  20,037  in Cigna Corporation on January 25, 2020 and sell it today you would earn a total of  1,682  from holding Cigna Corporation or generate 8.39% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

CVS Health Corp.  vs.  Cigna Corp.

 Performance (%) 
CVS Health 

Risk-Adjusted Performance

Over the last 30 days CVS Health Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In defiance of relatively invariable forward-looking signals, CVS Health is not utilizing all of its potentials. The prevalent stock price agitation, may contribute to short term losses for the management.

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Cigna Corporation are ranked lower than 5 (%) of all global equities and portfolios over the last 30 days. Despite nearly weak fundamental indicators, Cigna may actually be approaching a critical reversion point that can send shares even higher in March 2020.

CVS Health and Cigna Volatility Contrast

 Predicted Return Density 
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