Correlation Between Cigna Corp and Zynex

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

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

Diversification Opportunities for Cigna Corp and Zynex

-0.59

Correlation Coefficient

Cigna Corp  Zynex

Excellent diversification

The 3 months correlation between Cigna and Zynex is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Zynex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zynex Inc 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 Zynex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zynex Inc has no effect on the direction of Cigna Corp i.e., Cigna Corp and Zynex go up and down completely randomly.

Pair Corralation between Cigna Corp and Zynex

Allowing for the 90-day total investment horizon Cigna Corp is expected to under-perform the Zynex. But the stock apears to be less risky and, when comparing its historical volatility, Cigna Corp is 1.78 times less risky than Zynex. The stock trades about -0.06 of its potential returns per unit of risk. The Zynex Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  789.00  in Zynex Inc on August 31, 2024 and sell it today you would earn a total of  43.00  from holding Zynex Inc or generate 5.45% 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.  Zynex Inc

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.

Zynex Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zynex Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Zynex may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Cigna Corp and Zynex

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

The idea behind Cigna Corp and Zynex Inc 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 Stocks Directory module to find actively traded stocks across global markets.