Correlation Between Palantir Technologies and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Costco Wholesale 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 Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and Costco Wholesale, you can compare the effects of market volatilities on Palantir Technologies and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Costco Wholesale.
Diversification Opportunities for Palantir Technologies and Costco Wholesale
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palantir and Costco is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Costco Wholesale go up and down completely randomly.
Pair Corralation between Palantir Technologies and Costco Wholesale
Assuming the 90 days trading horizon Palantir Technologies is expected to generate 3.38 times more return on investment than Costco Wholesale. However, Palantir Technologies is 3.38 times more volatile than Costco Wholesale. It trades about 0.34 of its potential returns per unit of risk. Costco Wholesale is currently generating about 0.27 per unit of risk. If you would invest 8,595 in Palantir Technologies on August 26, 2024 and sell it today you would earn a total of 3,770 from holding Palantir Technologies or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies vs. Costco Wholesale
Performance |
| Timeline |
| Palantir Technologies |
| Costco Wholesale |
Palantir Technologies and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Costco Wholesale
The main advantage of trading using opposite Palantir Technologies and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Palantir Technologies vs. Fras le SA | Palantir Technologies vs. Western Digital | Palantir Technologies vs. Clave Indices De | Palantir Technologies vs. BTG Pactual Logstica |
| Costco Wholesale vs. Fras le SA | Costco Wholesale vs. Clave Indices De | Costco Wholesale vs. BTG Pactual Logstica | Costco Wholesale vs. Telefonaktiebolaget LM Ericsson |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |