Correlation Between VIRGIN WINES and Palantir Technologies

Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES 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 VIRGIN WINES and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIRGIN WINES UK and Palantir Technologies, you can compare the effects of market volatilities on VIRGIN WINES 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 VIRGIN WINES with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and Palantir Technologies.

Diversification Opportunities for VIRGIN WINES and Palantir Technologies

-0.04

Correlation Coefficient

VIRGIN WINES  Palantir Technologies

Good diversification

The 3 months correlation between VIRGIN and Palantir is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and VIRGIN WINES 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 VIRGIN WINES UK 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 VIRGIN WINES i.e., VIRGIN WINES and Palantir Technologies go up and down completely randomly.

Pair Corralation between VIRGIN WINES and Palantir Technologies

Assuming the 90 days horizon VIRGIN WINES UK is expected to under-perform the Palantir Technologies. In addition to that, VIRGIN WINES is 1.39 times more volatile than Palantir Technologies. It trades about -0.1 of its total potential returns per unit of risk. Palantir Technologies is currently generating about 0.05 per unit of volatility. If you would invest  7,388  in Palantir Technologies on December 30, 2024 and sell it today you would earn a total of  504.00  from holding Palantir Technologies or generate 6.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

VIRGIN WINES UK  vs.  Palantir Technologies

VIRGIN WINES UK

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIRGIN WINES UK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Palantir Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIRGIN WINES and Palantir Technologies

The main advantage of trading using opposite VIRGIN WINES and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRGIN WINES 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.

The idea behind VIRGIN WINES UK and Palantir Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.