Correlation Between Palantir Technologies and GSK Plc
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and GSK Plc 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 GSK Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and GSK plc, you can compare the effects of market volatilities on Palantir Technologies and GSK Plc 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 GSK Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and GSK Plc.
Diversification Opportunities for Palantir Technologies and GSK Plc
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Palantir and GSK is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and GSK plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSK plc 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 GSK Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSK plc has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and GSK Plc go up and down completely randomly.
Pair Corralation between Palantir Technologies and GSK Plc
Assuming the 90 days trading horizon Palantir Technologies is expected to generate 2.22 times more return on investment than GSK Plc. However, Palantir Technologies is 2.22 times more volatile than GSK plc. It trades about 0.13 of its potential returns per unit of risk. GSK plc is currently generating about 0.03 per unit of risk. If you would invest 1,335 in Palantir Technologies on September 4, 2024 and sell it today you would earn a total of 12,104 from holding Palantir Technologies or generate 906.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 86.8% |
| Values | Daily Returns |
Palantir Technologies vs. GSK plc
Performance |
| Timeline |
| Palantir Technologies |
| GSK plc |
Palantir Technologies and GSK Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and GSK Plc
The main advantage of trading using opposite Palantir Technologies and GSK Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, GSK Plc 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 GSK Plc will offset losses from the drop in GSK Plc's long position.| Palantir Technologies vs. Fundo Investimento Imobiliario | Palantir Technologies vs. Fras le SA | Palantir Technologies vs. Western Digital | Palantir Technologies vs. Clave Indices De |
| GSK Plc vs. Telecomunicaes Brasileiras SA | GSK Plc vs. Cognizant Technology Solutions | GSK Plc vs. T Mobile | GSK Plc vs. Take Two Interactive Software |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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