Correlation Between Cigna Corp and Everest

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

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

Diversification Opportunities for Cigna Corp and Everest

0.71

Correlation Coefficient

Cigna Corp  Everest

Poor diversification

The 3 months correlation between Cigna and Everest is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Cigna Corp i.e., Cigna Corp and Everest go up and down completely randomly.

Pair Corralation between Cigna Corp and Everest

Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 23.69 times less return on investment than Everest. In addition to that, Cigna Corp is 1.08 times more volatile than Everest Group. It trades about 0.0 of its total potential returns per unit of risk. Everest Group is currently generating about 0.02 per unit of volatility. If you would invest  32,564  in Everest Group on October 11, 2024 and sell it today you would earn a total of  4,279  from holding Everest Group or generate 13.14% return on investment over 90 days.

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

Cigna Corp  vs.  Everest Group

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 abnormal performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Everest Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cigna Corp and Everest

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

The idea behind Cigna Corp and Everest Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.