Correlation Between Argentum and Palantir Technologies

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

By analyzing existing cross correlation between Argentum 47 and Palantir Technologies Class, you can compare the effects of market volatilities on Argentum 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 Argentum with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argentum and Palantir Technologies.

Diversification Opportunities for Argentum and Palantir Technologies

-0.76

Correlation Coefficient

Argentum  Palantir Technologies

Pay attention - limited upside

The 3 months correlation between Argentum and Palantir is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Argentum 47 and Palantir Technologies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Argentum 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 Argentum 47 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 Argentum i.e., Argentum and Palantir Technologies go up and down completely randomly.

Pair Corralation between Argentum and Palantir Technologies

Given the investment horizon of 90 days Argentum 47 is expected to generate 8.42 times more return on investment than Palantir Technologies. However, Argentum is 8.42 times more volatile than Palantir Technologies Class. It trades about 0.2 of its potential returns per unit of risk. Palantir Technologies Class is currently generating about -0.04 per unit of risk. If you would invest  0.61  in Argentum 47 on October 26, 2024 and sell it today you would earn a total of  0.32  from holding Argentum 47 or generate 52.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Argentum 47  vs.  Palantir Technologies Class

Argentum 47

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Argentum 47 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal technical and fundamental indicators, Argentum reported solid returns over the last few months and may actually be approaching a breakup point.

Palantir Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Argentum and Palantir Technologies

The main advantage of trading using opposite Argentum and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argentum 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 Argentum 47 and Palantir Technologies Class 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.