Correlation Between Quidel and Cigna Corp

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

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

Diversification Opportunities for Quidel and Cigna Corp

-0.53

Correlation Coefficient

Quidel  Cigna Corp

Excellent diversification

The 3 months correlation between Quidel and Cigna is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Quidel and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Quidel 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 Quidel 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 Quidel i.e., Quidel and Cigna Corp go up and down completely randomly.

Pair Corralation between Quidel and Cigna Corp

Given the investment horizon of 90 days Quidel is expected to under-perform the Cigna Corp. In addition to that, Quidel is 1.69 times more volatile than Cigna Corp. It trades about -0.03 of its total potential returns per unit of risk. Cigna Corp is currently generating about 0.0 per unit of volatility. If you would invest  29,776  in Cigna Corp on October 12, 2024 and sell it today you would lose (1,877) from holding Cigna Corp or give up 6.3% of portfolio value over 90 days.

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

Quidel  vs.  Cigna Corp

Quidel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quidel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Quidel disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 Quidel and Cigna Corp

The main advantage of trading using opposite Quidel and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quidel 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 Quidel 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 CEOs Directory module to screen CEOs from public companies around the world.