Correlation Between Palantir Technologies and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Fast Retailing 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 Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and Fast Retailing Co, you can compare the effects of market volatilities on Palantir Technologies and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Fast Retailing.
Diversification Opportunities for Palantir Technologies and Fast Retailing
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Palantir and Fast is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Fast Retailing go up and down completely randomly.
Pair Corralation between Palantir Technologies and Fast Retailing
Assuming the 90 days horizon Palantir Technologies is expected to generate 2.99 times more return on investment than Fast Retailing. However, Palantir Technologies is 2.99 times more volatile than Fast Retailing Co. It trades about 0.33 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.05 per unit of risk. If you would invest 4,179 in Palantir Technologies on August 29, 2024 and sell it today you would earn a total of 2,080 from holding Palantir Technologies or generate 49.77% 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. Fast Retailing Co
Performance |
| Timeline |
| Palantir Technologies |
| Fast Retailing |
Palantir Technologies and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Fast Retailing
The main advantage of trading using opposite Palantir Technologies and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Palantir Technologies vs. Selective Insurance Group | Palantir Technologies vs. INSURANCE AUST GRP | Palantir Technologies vs. Universal Insurance Holdings | Palantir Technologies vs. HANOVER INSURANCE |
| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Microsoft | Fast Retailing vs. Microsoft |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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