Correlation Between CVB Financial and Palantir Technologies

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

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

Diversification Opportunities for CVB Financial and Palantir Technologies

-0.01

Correlation Coefficient

CVB Financial  Palantir Technologies

Good diversification

The 3 months correlation between CVB and Palantir is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CVB Financial Corp and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and CVB Financial 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 CVB Financial Corp 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 CVB Financial i.e., CVB Financial and Palantir Technologies go up and down completely randomly.

Pair Corralation between CVB Financial and Palantir Technologies

Assuming the 90 days horizon CVB Financial Corp is expected to under-perform the Palantir Technologies. But the stock apears to be less risky and, when comparing its historical volatility, CVB Financial Corp is 3.27 times less risky than Palantir Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Palantir Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,700  in Palantir Technologies on December 20, 2024 and sell it today you would lose (25.00) from holding Palantir Technologies or give up 0.32% of portfolio value over 90 days.

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

CVB Financial Corp  vs.  Palantir Technologies

CVB Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Palantir Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CVB Financial and Palantir Technologies

The main advantage of trading using opposite CVB Financial and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVB Financial 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 CVB Financial Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.