Correlation Between Companhia Siderrgica and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica 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 Companhia Siderrgica and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderrgica Nacional and Palantir Technologies, you can compare the effects of market volatilities on Companhia Siderrgica 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 Companhia Siderrgica with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Palantir Technologies.
Diversification Opportunities for Companhia Siderrgica and Palantir Technologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Palantir is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Companhia Siderrgica 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 Companhia Siderrgica Nacional 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 Companhia Siderrgica i.e., Companhia Siderrgica and Palantir Technologies go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Palantir Technologies
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to under-perform the Palantir Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Siderrgica Nacional is 1.77 times less risky than Palantir Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Palantir Technologies is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 8,594 in Palantir Technologies on August 27, 2024 and sell it today you would earn a total of 3,771 from holding Palantir Technologies or generate 43.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Palantir Technologies
Performance |
| Timeline |
| Companhia Siderrgica |
| Palantir Technologies |
Companhia Siderrgica and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Palantir Technologies
The main advantage of trading using opposite Companhia Siderrgica and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica 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.| Companhia Siderrgica vs. Palantir Technologies | Companhia Siderrgica vs. Warner Music Group | Companhia Siderrgica vs. Verizon Communications | Companhia Siderrgica vs. Dell Technologies |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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