Correlation Between Wellstar International and Cigna Corp

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

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

Diversification Opportunities for Wellstar International and Cigna Corp

0.0

Correlation Coefficient

Wellstar International  Cigna Corp

Pay attention - limited upside

The 3 months correlation between Wellstar and Cigna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wellstar International and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Wellstar International 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 Wellstar International 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 Wellstar International i.e., Wellstar International and Cigna Corp go up and down completely randomly.

Pair Corralation between Wellstar International and Cigna Corp

If you would invest  0.00  in Wellstar International on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Wellstar International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Wellstar International  vs.  Cigna Corp

Wellstar International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wellstar International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Wellstar International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 Wellstar International and Cigna Corp

The main advantage of trading using opposite Wellstar International and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wellstar International 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 Wellstar International 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.