Correlation Between Inflection Point and CIGNA

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

By analyzing existing cross correlation between Inflection Point Acquisition and CIGNA P 305, you can compare the effects of market volatilities on Inflection Point and CIGNA 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 Inflection Point with a short position of CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and CIGNA.

Diversification Opportunities for Inflection Point and CIGNA

-0.19

Correlation Coefficient

Inflection Point  CIGNA

Good diversification

The 3 months correlation between Inflection and CIGNA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and CIGNA P 305 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 305 and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with CIGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIGNA P 305 has no effect on the direction of Inflection Point i.e., Inflection Point and CIGNA go up and down completely randomly.

Pair Corralation between Inflection Point and CIGNA

Assuming the 90 days horizon Inflection Point Acquisition is expected to under-perform the CIGNA. In addition to that, Inflection Point is 3.53 times more volatile than CIGNA P 305. It trades about -0.32 of its total potential returns per unit of risk. CIGNA P 305 is currently generating about -0.05 per unit of volatility. If you would invest  9,644  in CIGNA P 305 on December 5, 2024 and sell it today you would lose (53.00) from holding CIGNA P 305 or give up 0.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Inflection Point Acquisition  vs.  CIGNA P 305

Inflection Point Acq

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Inflection Point may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CIGNA P 305

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CIGNA P 305 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CIGNA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inflection Point and CIGNA

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

The idea behind Inflection Point Acquisition and CIGNA P 305 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.