Correlation Between Palantir Technologies and Alstom SA
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Alstom SA 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 Alstom SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies Class and Alstom SA, you can compare the effects of market volatilities on Palantir Technologies and Alstom SA 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 Alstom SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Alstom SA.
Diversification Opportunities for Palantir Technologies and Alstom SA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Palantir and Alstom is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Alstom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alstom SA 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 Class are associated (or correlated) with Alstom SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alstom SA has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Alstom SA go up and down completely randomly.
Pair Corralation between Palantir Technologies and Alstom SA
Given the investment horizon of 90 days Palantir Technologies Class is expected to generate 1.07 times more return on investment than Alstom SA. However, Palantir Technologies is 1.07 times more volatile than Alstom SA. It trades about -0.17 of its potential returns per unit of risk. Alstom SA is currently generating about -0.19 per unit of risk. If you would invest 8,069 in Palantir Technologies Class on October 22, 2024 and sell it today you would lose (892.00) from holding Palantir Technologies Class or give up 11.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Palantir Technologies Class vs. Alstom SA
Performance |
| Timeline |
| Palantir Technologies |
| Alstom SA |
Palantir Technologies and Alstom SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Alstom SA
The main advantage of trading using opposite Palantir Technologies and Alstom SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Alstom SA 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 Alstom SA will offset losses from the drop in Alstom SA's long position.| Palantir Technologies vs. Palo Alto Networks | Palantir Technologies vs. Adobe Systems Incorporated | Palantir Technologies vs. Crowdstrike Holdings | Palantir Technologies vs. BLOCK INC |
| Alstom SA vs. West Japan Railway | Alstom SA vs. Central Japan Railway | Alstom SA vs. LB Foster | Alstom SA vs. Norfolk Southern |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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