Correlation Between BridgeBio Pharma, and Cigna

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

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

Diversification Opportunities for BridgeBio Pharma, and Cigna

-0.57

Correlation Coefficient

BridgeBio Pharma,  Cigna

Excellent diversification

The 3 months correlation between BridgeBio and Cigna is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BridgeBio Pharma, and Cigna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna and BridgeBio Pharma, 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 BridgeBio Pharma, 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 has no effect on the direction of BridgeBio Pharma, i.e., BridgeBio Pharma, and Cigna go up and down completely randomly.

Pair Corralation between BridgeBio Pharma, and Cigna

Assuming the 90 days horizon BridgeBio Pharma, is expected to generate 1.42 times more return on investment than Cigna. However, BridgeBio Pharma, is 1.42 times more volatile than Cigna. It trades about 0.2 of its potential returns per unit of risk. Cigna is currently generating about -0.1 per unit of risk. If you would invest  2,960  in BridgeBio Pharma, on April 21, 2025 and sell it today you would earn a total of  994.00  from holding BridgeBio Pharma, or generate 33.58% return on investment over 90 days.

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

BridgeBio Pharma,  vs.  Cigna

BridgeBio Pharma,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BridgeBio Pharma, reported solid returns over the last few months and may actually be approaching a breakup point.

Cigna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cigna has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BridgeBio Pharma, and Cigna

The main advantage of trading using opposite BridgeBio Pharma, and Cigna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BridgeBio Pharma, 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 BridgeBio Pharma, and Cigna 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..