Analog input wiring for three wire sensor

Hello,
I am trying to connect a Laser Distance sensor to the analog input of a UR 20 Cobot.
The sensor has a 4-20mA output and is a three-wire device. The device requires about 60mA power @ 24Vdc.

Connection 1 = 24V supply => 24V supply from digital input terminal
Connection 4 = 4-20mA => analog input terminal
Connection 3 = 0v and return of 4-20mA loop

At present the Pin 3 is connected to the 0v from the digital I/O (digital output terminal). This connection seems to give a lot of noise or variation on the analog signal.(Variation of about 0.02mA of 0.5% on what should be a static signal) Should I connect this line to the analog ground? I’m concerned that the sensor supply current is also flowing through this wire.
Can you advise what sort of cabling is required to prevent noise pickup? The diagram implies a twisted pair for the analog signals. Currently I am using a standard M12 4 wire sensor cable, which has no shielding and no twisted cores.

Explanatory diagrams below: