Correlation Between Heartbeam Warrant and Cigna Corp

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

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

Diversification Opportunities for Heartbeam Warrant and Cigna Corp

-0.58

Correlation Coefficient

Heartbeam Warrant  Cigna Corp

Excellent diversification

The 3 months correlation between Heartbeam and Cigna is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Heartbeam Warrant and Cigna Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna Corp and Heartbeam Warrant 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 Heartbeam Warrant 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 Heartbeam Warrant i.e., Heartbeam Warrant and Cigna Corp go up and down completely randomly.

Pair Corralation between Heartbeam Warrant and Cigna Corp

Assuming the 90 days horizon Heartbeam Warrant is expected to generate 40.01 times more return on investment than Cigna Corp. However, Heartbeam Warrant is 40.01 times more volatile than Cigna Corp. It trades about 0.08 of its potential returns per unit of risk. Cigna Corp is currently generating about 0.02 per unit of risk. If you would invest  17.00  in Heartbeam Warrant on September 28, 2024 and sell it today you would earn a total of  44.00  from holding Heartbeam Warrant or generate 258.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	75.84%
Values	Daily Returns

Heartbeam Warrant  vs.  Cigna Corp

Heartbeam Warrant

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Heartbeam Warrant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Heartbeam Warrant showed 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Heartbeam Warrant and Cigna Corp

The main advantage of trading using opposite Heartbeam Warrant and Cigna Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartbeam Warrant 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 Heartbeam Warrant 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.