Correlation Between Engie SA and Cigna

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

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

Diversification Opportunities for Engie SA and Cigna

-0.71

Correlation Coefficient

Engie SA  Cigna

Pay attention - limited upside

The 3 months correlation between Engie and Cigna is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Engie SA and Cigna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna and Engie SA 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 Engie SA 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 Engie SA i.e., Engie SA and Cigna go up and down completely randomly.

Pair Corralation between Engie SA and Cigna

Assuming the 90 days trading horizon Engie SA is expected to generate 0.61 times more return on investment than Cigna. However, Engie SA is 1.64 times less risky than Cigna. It trades about 0.19 of its potential returns per unit of risk. Cigna is currently generating about -0.1 per unit of risk. If you would invest  1,735  in Engie SA on April 25, 2025 and sell it today you would earn a total of  226.00  from holding Engie SA or generate 13.03% return on investment over 90 days.

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

Engie SA  vs.  Cigna

Engie SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Engie SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Engie SA unveiled 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 Engie SA and Cigna

The main advantage of trading using opposite Engie SA and Cigna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie SA 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 Engie SA 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.