Correlation Between American Airlines and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both American Airlines and Palantir Technologies 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 American Airlines and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and Palantir Technologies, you can compare the effects of market volatilities on American Airlines and Palantir Technologies 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 American Airlines with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Palantir Technologies.
Diversification Opportunities for American Airlines and Palantir Technologies
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Palantir is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and American Airlines 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 American Airlines Group are associated (or correlated) with Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of American Airlines i.e., American Airlines and Palantir Technologies go up and down completely randomly.
Pair Corralation between American Airlines and Palantir Technologies
Assuming the 90 days trading horizon American Airlines Group is expected to under-perform the Palantir Technologies. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 3.76 times less risky than Palantir Technologies. The stock trades about -0.33 of its potential returns per unit of risk. The Palantir Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 14,724 in Palantir Technologies on November 27, 2024 and sell it today you would earn a total of 2,725 from holding Palantir Technologies or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Palantir Technologies
Performance |
| Timeline |
| American Airlines |
| Palantir Technologies |
American Airlines and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Palantir Technologies
The main advantage of trading using opposite American Airlines and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Palantir Technologies 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 Palantir Technologies will offset losses from the drop in Palantir Technologies' long position.| American Airlines vs. Caesars Entertainment, | American Airlines vs. Deutsche Bank Aktiengesellschaft | American Airlines vs. ICICI Bank Limited | American Airlines vs. NXP Semiconductors NV |
| Palantir Technologies vs. NXP Semiconductors NV | Palantir Technologies vs. Monster Beverage | Palantir Technologies vs. Tyson Foods | Palantir Technologies vs. Apartment Investment and |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |