Correlation Between Cigna Corp and FG Annuities

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

By analyzing existing cross correlation between Cigna Corp and FG Annuities Life, you can compare the effects of market volatilities on Cigna Corp and FG Annuities 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 FG Annuities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigna Corp and FG Annuities.

Diversification Opportunities for Cigna Corp and FG Annuities

-0.47

Correlation Coefficient

Cigna Corp  FG Annuities

Very good diversification

The 3 months correlation between Cigna and FGN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and FG Annuities Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Annuities Life 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 FG Annuities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Annuities Life has no effect on the direction of Cigna Corp i.e., Cigna Corp and FG Annuities go up and down completely randomly.

Pair Corralation between Cigna Corp and FG Annuities

Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 4.45 times more return on investment than FG Annuities. However, Cigna Corp is 4.45 times more volatile than FG Annuities Life. It trades about 0.08 of its potential returns per unit of risk. FG Annuities Life is currently generating about 0.09 per unit of risk. If you would invest  31,824  in Cigna Corp on August 25, 2024 and sell it today you would earn a total of  1,021  from holding Cigna Corp or generate 3.21% 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.  FG Annuities Life

Cigna Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cigna Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Cigna Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

FG Annuities Life

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FG Annuities Life are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, FG Annuities is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cigna Corp and FG Annuities

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

The idea behind Cigna Corp and FG Annuities Life 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.