Correlation Between Ping An and Dai Ichi

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

By analyzing existing cross correlation between Ping An Insurance and Dai ichi Life Holdings, you can compare the effects of market volatilities on Ping An and Dai Ichi 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 Ping An with a short position of Dai Ichi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Dai Ichi.

Diversification Opportunities for Ping An and Dai Ichi

0.12

Correlation Coefficient

Ping An  Dai Ichi

Average diversification

The 3 months correlation between Ping and Dai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance 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 Ping An 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 Ping An Insurance are associated (or correlated) with Dai Ichi. 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 Ping An i.e., Ping An and Dai Ichi go up and down completely randomly.

Pair Corralation between Ping An and Dai Ichi

Assuming the 90 days horizon Ping An Insurance is expected to generate 3.2 times more return on investment than Dai Ichi. However, Ping An is 3.2 times more volatile than Dai ichi Life Holdings. It trades about 0.07 of its potential returns per unit of risk. Dai ichi Life Holdings is currently generating about 0.15 per unit of risk. If you would invest  487.00  in Ping An Insurance on April 20, 2025 and sell it today you would earn a total of  84.00  from holding Ping An Insurance or generate 17.25% return on investment over 90 days.

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

Ping An Insurance  vs.  Dai ichi Life Holdings

Ping An Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ping An Insurance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ping An reported solid returns over the last few months and may actually be approaching a breakup point.

Dai ichi Life

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dai ichi Life Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dai Ichi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ping An and Dai Ichi

The main advantage of trading using opposite Ping An and Dai Ichi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, Dai Ichi 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 will offset losses from the drop in Dai Ichi's long position.

The idea behind Ping An Insurance and Dai ichi Life Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.