Correlation Between Samsung Electronics and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Palantir Technologies 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 Samsung Electronics and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Palantir Technologies, you can compare the effects of market volatilities on Samsung Electronics and Palantir Technologies 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 Samsung Electronics with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Palantir Technologies.
Diversification Opportunities for Samsung Electronics and Palantir Technologies
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Palantir is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Palantir Technologies go up and down completely randomly.
Pair Corralation between Samsung Electronics and Palantir Technologies
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 12.5 times less return on investment than Palantir Technologies. But when comparing it to its historical volatility, Samsung Electronics Co is 2.42 times less risky than Palantir Technologies. It trades about 0.06 of its potential returns per unit of risk. Palantir Technologies is currently generating about 0.33 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Palantir Technologies
Performance |
| Timeline |
| Samsung Electronics |
| Palantir Technologies |
Samsung Electronics and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Palantir Technologies
The main advantage of trading using opposite Samsung Electronics and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Palantir Technologies 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 Palantir Technologies will offset losses from the drop in Palantir Technologies' long position.| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc | Samsung Electronics vs. Apple Inc |
| Palantir Technologies vs. Selective Insurance Group | Palantir Technologies vs. INSURANCE AUST GRP | Palantir Technologies vs. Universal Insurance Holdings | Palantir Technologies vs. HANOVER INSURANCE |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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