Correlation Between Iradimed and Cigna Corp

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

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

Diversification Opportunities for Iradimed and Cigna Corp

-0.41

Correlation Coefficient

Iradimed  Cigna Corp

Very good diversification

The 3 months correlation between Iradimed and Cigna is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Iradimed Co and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Iradimed 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 Iradimed Co 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 Iradimed i.e., Iradimed and Cigna Corp go up and down completely randomly.

Pair Corralation between Iradimed and Cigna Corp

Given the investment horizon of 90 days Iradimed Co is expected to generate 0.56 times more return on investment than Cigna Corp. However, Iradimed Co is 1.79 times less risky than Cigna Corp. It trades about 0.1 of its potential returns per unit of risk. Cigna Corp is currently generating about -0.33 per unit of risk. If you would invest  5,275  in Iradimed Co on September 27, 2024 and sell it today you would earn a total of  146.00  from holding Iradimed Co or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Iradimed Co  vs.  Cigna Corp

Iradimed

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Iradimed Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Iradimed may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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

Pair Trading with Iradimed and Cigna Corp

The main advantage of trading using opposite Iradimed and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iradimed 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 Iradimed Co 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.