Correlation Between Cigna Corp and Stevanato Group

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

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

Diversification Opportunities for Cigna Corp and Stevanato Group

-0.71

Correlation Coefficient

Cigna Corp  Stevanato Group

Pay attention - limited upside

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

Pair Corralation between Cigna Corp and Stevanato Group

Allowing for the 90-day total investment horizon Cigna Corp is expected to generate 5.0 times less return on investment than Stevanato Group. But when comparing it to its historical volatility, Cigna Corp is 1.82 times less risky than Stevanato Group. It trades about 0.01 of its potential returns per unit of risk. Stevanato Group SpA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,972  in Stevanato Group SpA on October 24, 2024 and sell it today you would earn a total of  180.00  from holding Stevanato Group SpA or generate 9.13% 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.  Stevanato Group SpA

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 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.

Stevanato Group SpA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stevanato Group SpA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Stevanato Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cigna Corp and Stevanato Group

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

The idea behind Cigna Corp and Stevanato Group SpA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.