Correlation Between Palantir Technologies and Delta Air
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Delta Air 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 Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and Delta Air Lines, you can compare the effects of market volatilities on Palantir Technologies and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Delta Air.
Diversification Opportunities for Palantir Technologies and Delta Air
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palantir and Delta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Delta Air go up and down completely randomly.
Pair Corralation between Palantir Technologies and Delta Air
Assuming the 90 days trading horizon Palantir Technologies is expected to under-perform the Delta Air. In addition to that, Palantir Technologies is 1.63 times more volatile than Delta Air Lines. It trades about -0.07 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.13 per unit of volatility. If you would invest 38,091 in Delta Air Lines on October 28, 2024 and sell it today you would earn a total of 2,310 from holding Delta Air Lines or generate 6.06% 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. Delta Air Lines
Performance |
| Timeline |
| Palantir Technologies |
| Delta Air Lines |
Palantir Technologies and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Delta Air
The main advantage of trading using opposite Palantir Technologies and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Palantir Technologies vs. Discover Financial Services | Palantir Technologies vs. LPL Financial Holdings | Palantir Technologies vs. Applied Materials, | Palantir Technologies vs. Jefferies Financial Group |
| Delta Air vs. Paycom Software | Delta Air vs. Unity Software | Delta Air vs. Bemobi Mobile Tech | Delta Air vs. DXC Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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