Correlation Between Cigna Corp and Intuitive Surgical

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

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

Diversification Opportunities for Cigna Corp and Intuitive Surgical

-0.57

Correlation Coefficient

Cigna Corp  Intuitive Surgical

Excellent diversification

The 3 months correlation between Cigna and Intuitive is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cigna Corp and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Cigna Corp 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 Cigna Corp are associated (or correlated) with Intuitive Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Surgical has no effect on the direction of Cigna Corp i.e., Cigna Corp and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Cigna Corp and Intuitive Surgical

Allowing for the 90-day total investment horizon Cigna Corp is expected to under-perform the Intuitive Surgical. But the stock apears to be less risky and, when comparing its historical volatility, Cigna Corp is 1.02 times less risky than Intuitive Surgical. The stock trades about 0.0 of its potential returns per unit of risk. The Intuitive Surgical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  27,000  in Intuitive Surgical on September 25, 2024 and sell it today you would earn a total of  26,398  from holding Intuitive Surgical or generate 97.77% return on investment over 90 days.

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

Cigna Corp  vs.  Intuitive Surgical

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.

Intuitive Surgical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuitive Surgical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Intuitive Surgical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cigna Corp and Intuitive Surgical

The main advantage of trading using opposite Cigna Corp and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cigna Corp position performs unexpectedly, Intuitive Surgical 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 Intuitive Surgical will offset losses from the drop in Intuitive Surgical's long position.

The idea behind Cigna Corp and Intuitive Surgical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.