Correlation Between Palantir Technologies and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Bread Financial 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 Palantir Technologies and Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and Bread Financial Holdings, you can compare the effects of market volatilities on Palantir Technologies and Bread Financial 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 Palantir Technologies with a short position of Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Bread Financial.
Diversification Opportunities for Palantir Technologies and Bread Financial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Palantir and Bread is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings and Palantir Technologies 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 Palantir Technologies are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Bread Financial go up and down completely randomly.
Pair Corralation between Palantir Technologies and Bread Financial
Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.32 times more return on investment than Bread Financial. However, Palantir Technologies is 1.32 times more volatile than Bread Financial Holdings. It trades about 0.15 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.05 per unit of risk. If you would invest 1,386 in Palantir Technologies on November 19, 2024 and sell it today you would earn a total of 21,364 from holding Palantir Technologies or generate 1541.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.71% |
| Values | Daily Returns |
Palantir Technologies vs. Bread Financial Holdings
Performance |
| Timeline |
| Palantir Technologies |
| Bread Financial Holdings |
Palantir Technologies and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Bread Financial
The main advantage of trading using opposite Palantir Technologies and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Palantir Technologies vs. Bread Financial Holdings | Palantir Technologies vs. Synchrony Financial | Palantir Technologies vs. Citizens Financial Group, | Palantir Technologies vs. Ameriprise Financial |
| Bread Financial vs. Costco Wholesale | Bread Financial vs. Electronic Arts | Bread Financial vs. Tyson Foods | Bread Financial vs. Automatic Data Processing |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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