Correlation Between MetLife Preferred and Dai-ichi Life
Can any of the company-specific risk be diversified away by investing in both MetLife Preferred and Dai-ichi Life 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 MetLife Preferred and Dai-ichi Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife Preferred Stock and Dai ichi Life Holdings, you can compare the effects of market volatilities on MetLife Preferred and Dai-ichi Life 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 MetLife Preferred with a short position of Dai-ichi Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife Preferred and Dai-ichi Life.
Diversification Opportunities for MetLife Preferred and Dai-ichi Life
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetLife and Dai-ichi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding MetLife Preferred Stock and Dai ichi Life Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dai ichi Life and MetLife Preferred 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 MetLife Preferred Stock are associated (or correlated) with Dai-ichi Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dai ichi Life has no effect on the direction of MetLife Preferred i.e., MetLife Preferred and Dai-ichi Life go up and down completely randomly.
Pair Corralation between MetLife Preferred and Dai-ichi Life
Assuming the 90 days trading horizon MetLife Preferred is expected to generate 4.88 times less return on investment than Dai-ichi Life. But when comparing it to its historical volatility, MetLife Preferred Stock is 5.66 times less risky than Dai-ichi Life. It trades about 0.09 of its potential returns per unit of risk. Dai ichi Life Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,819 in Dai ichi Life Holdings on August 31, 2024 and sell it today you would earn a total of 729.00 from holding Dai ichi Life Holdings or generate 40.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 43.58% |
| Values | Daily Returns |
MetLife Preferred Stock vs. Dai ichi Life Holdings
Performance |
| Timeline |
| MetLife Preferred Stock |
| Dai ichi Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MetLife Preferred and Dai-ichi Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife Preferred and Dai-ichi Life
The main advantage of trading using opposite MetLife Preferred and Dai-ichi Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife Preferred position performs unexpectedly, Dai-ichi Life 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 Dai-ichi Life will offset losses from the drop in Dai-ichi Life's long position.| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial |
| Dai-ichi Life vs. Globe Life | Dai-ichi Life vs. Prudential Public Limited | Dai-ichi Life vs. CNO Financial Group | Dai-ichi Life vs. MetLife Preferred Stock |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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