Correlation Between Palantir Technologies and Lucid
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Lucid 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 Lucid 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 Lucid Group, you can compare the effects of market volatilities on Palantir Technologies and Lucid 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 Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Lucid.
Diversification Opportunities for Palantir Technologies and Lucid
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Palantir and Lucid is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Lucid go up and down completely randomly.
Pair Corralation between Palantir Technologies and Lucid
Given the investment horizon of 90 days Palantir Technologies Class is expected to under-perform the Lucid. But the stock apears to be less risky and, when comparing its historical volatility, Palantir Technologies Class is 1.1 times less risky than Lucid. The stock trades about -0.14 of its potential returns per unit of risk. The Lucid Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Lucid Group on October 23, 2024 and sell it today you would lose (24.00) from holding Lucid Group or give up 7.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies Class vs. Lucid Group
Performance |
| Timeline |
| Palantir Technologies |
| Lucid Group |
Palantir Technologies and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Lucid
The main advantage of trading using opposite Palantir Technologies and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| Palantir Technologies vs. Palo Alto Networks | Palantir Technologies vs. Uipath Inc | Palantir Technologies vs. BLOCK INC | Palantir Technologies vs. Adobe Systems Incorporated |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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