Correlation Between Juniata Valley and CIGNA

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

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

Diversification Opportunities for Juniata Valley and CIGNA

-0.37

Correlation Coefficient

Juniata Valley  CIGNA

Very good diversification

The 3 months correlation between Juniata and CIGNA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and CIGNA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P and Juniata Valley 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 Juniata Valley Financial 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 has no effect on the direction of Juniata Valley i.e., Juniata Valley and CIGNA go up and down completely randomly.

Pair Corralation between Juniata Valley and CIGNA

Given the investment horizon of 90 days Juniata Valley Financial is expected to under-perform the CIGNA. But the otc stock apears to be less risky and, when comparing its historical volatility, Juniata Valley Financial is 1.44 times less risky than CIGNA. The otc stock trades about -0.14 of its potential returns per unit of risk. The CIGNA P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  9,115  in CIGNA P on October 8, 2024 and sell it today you would lose (75.00) from holding CIGNA P or give up 0.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Juniata Valley Financial  vs.  CIGNA P

Juniata Valley Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

CIGNA P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CIGNA P has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Juniata Valley and CIGNA

The main advantage of trading using opposite Juniata Valley and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley 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 Juniata Valley Financial and CIGNA P 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.