Correlation Between Cigna Corp and Catheter Precision

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

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

Diversification Opportunities for Cigna Corp and Catheter Precision

-0.67

Correlation Coefficient

Cigna Corp  Catheter Precision

Excellent diversification

The 3 months correlation between Cigna and Catheter is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Cigna Corp i.e., Cigna Corp and Catheter Precision go up and down completely randomly.

Pair Corralation between Cigna Corp and Catheter Precision

Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 0.43 times more return on investment than Catheter Precision. However, Cigna Corp is 2.3 times less risky than Catheter Precision. It trades about 0.13 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.1 per unit of risk. If you would invest  28,319  in Cigna Corp on January 15, 2025 and sell it today you would earn a total of  4,544  from holding Cigna Corp or generate 16.05% return on investment over 90 days.

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

Cigna Corp  vs.  Catheter Precision

Cigna Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cigna Corp are ranked lower than 10 (%) 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.

Catheter Precision

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catheter Precision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cigna Corp and Catheter Precision

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

The idea behind Cigna Corp and Catheter Precision 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.