Correlation Between Cigna Corp and Teladoc

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

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

Diversification Opportunities for Cigna Corp and Teladoc

-0.81

Correlation Coefficient

Cigna Corp  Teladoc

Pay attention - limited upside

The 3 months correlation between Cigna and Teladoc is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc 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 Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Cigna Corp i.e., Cigna Corp and Teladoc go up and down completely randomly.

Pair Corralation between Cigna Corp and Teladoc

Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 0.34 times more return on investment than Teladoc. However, Cigna Corp is 2.92 times less risky than Teladoc. It trades about 0.15 of its potential returns per unit of risk. Teladoc is currently generating about -0.1 per unit of risk. If you would invest  29,103  in Cigna Corp on February 3, 2025 and sell it today you would earn a total of  4,372  from holding Cigna Corp or generate 15.02% return on investment over 90 days.

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

Cigna Corp  vs.  Teladoc

Cigna Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cigna Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal forward indicators, Cigna Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Teladoc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teladoc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cigna Corp and Teladoc

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

The idea behind Cigna Corp and Teladoc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.