Correlation Between Hamilton Insurance and Cigna Corp

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

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

Diversification Opportunities for Hamilton Insurance and Cigna Corp

-0.15

Correlation Coefficient

Hamilton Insurance  Cigna Corp

Good diversification

The 3 months correlation between Hamilton and Cigna is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Insurance Group, and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Hamilton Insurance 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 Hamilton Insurance Group, are associated (or correlated) with Cigna Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cigna Corp has no effect on the direction of Hamilton Insurance i.e., Hamilton Insurance and Cigna Corp go up and down completely randomly.

Pair Corralation between Hamilton Insurance and Cigna Corp

Allowing for the 90-day total investment horizon Hamilton Insurance Group, is expected to generate 1.2 times more return on investment than Cigna Corp. However, Hamilton Insurance is 1.2 times more volatile than Cigna Corp. It trades about 0.05 of its potential returns per unit of risk. Cigna Corp is currently generating about 0.0 per unit of risk. If you would invest  1,500  in Hamilton Insurance Group, on October 11, 2024 and sell it today you would earn a total of  386.00  from holding Hamilton Insurance Group, or generate 25.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.99%
Values	Daily Returns

Hamilton Insurance Group,  vs.  Cigna Corp

Hamilton Insurance Group,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hamilton Insurance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Hamilton Insurance and Cigna Corp

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

The idea behind Hamilton Insurance Group, and Cigna Corp 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.