Correlation Between Globus Medical, and Palantir Technologies

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Can any of the company-specific risk be diversified away by investing in both Globus Medical, 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 Globus Medical, and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical, and Palantir Technologies, you can compare the effects of market volatilities on Globus Medical, 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 Globus Medical, with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical, and Palantir Technologies.

Diversification Opportunities for Globus Medical, and Palantir Technologies

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Globus and Palantir is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical, and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Globus Medical, 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 Globus Medical, 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 Globus Medical, i.e., Globus Medical, and Palantir Technologies go up and down completely randomly.

Pair Corralation between Globus Medical, and Palantir Technologies

Assuming the 90 days trading horizon Globus Medical, is expected to generate 1.8 times less return on investment than Palantir Technologies. But when comparing it to its historical volatility, Globus Medical, is 2.55 times less risky than Palantir Technologies. It trades about 0.2 of its potential returns per unit of risk. Palantir Technologies is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,183  in Palantir Technologies on October 5, 2024 and sell it today you would earn a total of  14,267  from holding Palantir Technologies or generate 1206.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy17.74%
ValuesDaily Returns

Globus Medical,  vs.  Palantir Technologies

 Performance 
       Timeline  
Globus Medical, 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Globus Medical, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak primary indicators, Globus Medical, sustained solid returns over the last few months and may actually be approaching a breakup point.
Palantir Technologies 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Palantir Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Globus Medical, and Palantir Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Globus Medical, and Palantir Technologies

The main advantage of trading using opposite Globus Medical, and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical, 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 Globus Medical, 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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