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

-0.81

Correlation Coefficient

Cigna Corp  Intuitive Surgical

Pay attention - limited upside

The 3 months correlation between Cigna and Intuitive is -0.81. 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 generate 0.42 times more return on investment than Intuitive Surgical. However, Cigna Corp is 2.37 times less risky than Intuitive Surgical. It trades about 0.15 of its potential returns per unit of risk. Intuitive Surgical is currently generating about -0.04 per unit of risk. If you would invest  30,999  in Cigna Corp on January 31, 2025 and sell it today you would earn a total of  3,005  from holding Cigna Corp or generate 9.69% return on investment over 90 days.

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

Cigna Corp  vs.  Intuitive Surgical

Cigna Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cigna Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal forward indicators, Cigna Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Surgical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.