Correlation Between Palantir Technologies and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and SBM OFFSHORE 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 SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and SBM OFFSHORE, you can compare the effects of market volatilities on Palantir Technologies and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and SBM OFFSHORE.
Diversification Opportunities for Palantir Technologies and SBM OFFSHORE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Palantir and SBM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Palantir Technologies and SBM OFFSHORE
Assuming the 90 days horizon Palantir Technologies is expected to generate 2.76 times more return on investment than SBM OFFSHORE. However, Palantir Technologies is 2.76 times more volatile than SBM OFFSHORE. It trades about 0.12 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.04 per unit of risk. If you would invest 699.00 in Palantir Technologies on September 3, 2024 and sell it today you would earn a total of 5,635 from holding Palantir Technologies or generate 806.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies vs. SBM OFFSHORE
Performance |
| Timeline |
| Palantir Technologies |
| SBM OFFSHORE |
Palantir Technologies and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and SBM OFFSHORE
The main advantage of trading using opposite Palantir Technologies and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| Palantir Technologies vs. Marie Brizard Wine | Palantir Technologies vs. ITALIAN WINE BRANDS | Palantir Technologies vs. Perseus Mining Limited | Palantir Technologies vs. VIRGIN WINES UK |
| SBM OFFSHORE vs. TOTAL GABON | SBM OFFSHORE vs. Walgreens Boots Alliance | SBM OFFSHORE vs. Peak Resources Limited |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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