205.37 -6.38 (-3.1%) Buy

CI investors doing a reality check

13 min read

CIGNA CORP was among the worst performers today. It returned -3.1% to close at 205.37. During the last week it returned -0.34% and saw a maximum drawdown of -3.1% before bouncing back.

[Themes containing CI]

CI is currently in a up trend. The current bullish signal has generated a profit of +3.81% for CI's investors in the last three months.


CI has been underperforming the SP500 index in recent time, after having outperformed till 29 Nov, 2018. Over the last 2 years 11 months and 10 days, CI outperformed the SP500 index on 52% days.

During the last three months CI was mostly profitable and delivered on average +0.07% per day. It's best return during this period (of +4.18%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -4.0%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 21 Nov, 2018 and went on till 3 Dec, 2018. The bullish trend returned +7.95% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -8.64% of investor capital.

On monthly basis, CI delivered profits in more months over the last year, than losses. CI delivered profits less regularly than SP500 index. CI was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -14.37% compared to -7.28% returned by SP500 index in Oct 2018. CI and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both CI and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Stay on top of your finances. Don't leave that up to others.

CI is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in CI's volatility from 17 Sep, 2018 to 5 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CI has significant positive skewness in it's return distribution. This indicates that investors can expect CI to recover from drawdowns quickly. Which makes CI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in CI derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than CI. Therefore, SP500 must receive a lower allocation than CI in your portfolio. SP500 index usually has shorter drawdown period than CI.

On a general note (since you are interested in CI), three instruments that are extremely volatile are IMTE, VIPS and OPNT. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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