Correlation Between Cigna Corp and Cosmos Health

Can any of the company-specific risk be diversified away by investing in both Cigna Corp and Cosmos Health 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 Cigna Corp and Cosmos Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cigna Corp and Cosmos Health, you can compare the effects of market volatilities on Cigna Corp and Cosmos Health 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 Corp with a short position of Cosmos Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and Cosmos Health.

Diversification Opportunities for Cigna Corp and Cosmos Health

-0.59

Correlation Coefficient

Cigna Corp  Cosmos Health

Excellent diversification

The 3 months correlation between Cigna and Cosmos is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Cosmos Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Health and Cigna Corp 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 Corp are associated (or correlated) with Cosmos Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Health has no effect on the direction of Cigna Corp i.e., Cigna Corp and Cosmos Health go up and down completely randomly.

Pair Corralation between Cigna Corp and Cosmos Health

Allowing for the 90-day total investment horizon Cigna Corp is expected to under-perform the Cosmos Health. But the stock apears to be less risky and, when comparing its historical volatility, Cigna Corp is 3.56 times less risky than Cosmos Health. The stock trades about -0.1 of its potential returns per unit of risk. The Cosmos Health is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Cosmos Health on May 2, 2025 and sell it today you would earn a total of  45.00  from holding Cosmos Health or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cigna Corp  vs.  Cosmos Health

Cigna Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cigna Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Cosmos Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos Health are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cosmos Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cigna Corp and Cosmos Health

The main advantage of trading using opposite Cigna Corp and Cosmos Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Cosmos Health 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 Cosmos Health will offset losses from the drop in Cosmos Health's long position.

The idea behind Cigna Corp and Cosmos Health 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.