Correlation Between Palantir Technologies and Square
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Square 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 Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir Technologies and Square Inc, you can compare the effects of market volatilities on Palantir Technologies and Square 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 Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Square.
Diversification Opportunities for Palantir Technologies and Square
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Palantir and Square is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Square Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Square Inc 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 Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Square Inc has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Square go up and down completely randomly.
Pair Corralation between Palantir Technologies and Square
Assuming the 90 days horizon Palantir Technologies is expected to generate 1.28 times more return on investment than Square. However, Palantir Technologies is 1.28 times more volatile than Square Inc. It trades about 0.0 of its potential returns per unit of risk. Square Inc is currently generating about 0.0 per unit of risk. If you would invest 7,611 in Palantir Technologies on October 28, 2024 and sell it today you would lose (77.00) from holding Palantir Technologies or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies vs. Square Inc
Performance |
| Timeline |
| Palantir Technologies |
| Square Inc |
Palantir Technologies and Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and Square
The main advantage of trading using opposite Palantir Technologies and Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, Square 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 Square will offset losses from the drop in Square's long position.| Palantir Technologies vs. PARKEN Sport Entertainment | Palantir Technologies vs. BII Railway Transportation | Palantir Technologies vs. SCIENCE IN SPORT | Palantir Technologies vs. Siamgas And Petrochemicals |
| Square vs. Shopify | Square vs. BYD Company Limited | Square vs. PayPal Holdings | Square 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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