Correlation Between Palantir Technologies and GP Investments
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and GP Investments 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 GP Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and GP Investments, you can compare the effects of market volatilities on Palantir Technologies and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and GP Investments.
Diversification Opportunities for Palantir Technologies and GP Investments
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Palantir and GPIV33 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and GP Investments go up and down completely randomly.
Pair Corralation between Palantir Technologies and GP Investments
Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.08 times more return on investment than GP Investments. However, Palantir Technologies is 1.08 times more volatile than GP Investments. It trades about 0.25 of its potential returns per unit of risk. GP Investments is currently generating about 0.03 per unit of risk. If you would invest 5,087 in Palantir Technologies on October 26, 2024 and sell it today you would earn a total of 10,453 from holding Palantir Technologies or generate 205.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies vs. GP Investments
Performance |
| Timeline |
| Palantir Technologies |
| GP Investments |
Palantir Technologies and GP Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and GP Investments
The main advantage of trading using opposite Palantir Technologies and GP Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, GP Investments 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 GP Investments will offset losses from the drop in GP Investments' long position.| Palantir Technologies vs. Ross Stores | Palantir Technologies vs. Darden Restaurants, | Palantir Technologies vs. Tyson Foods | Palantir Technologies vs. Hormel Foods |
| GP Investments vs. Metalurgica Gerdau SA | GP Investments vs. SSC Technologies Holdings, | GP Investments vs. Hospital Mater Dei | GP Investments vs. Palantir Technologies |
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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