Correlation Between HALI34 and Palantir Technologies

Can any of the company-specific risk be diversified away by investing in both HALI34 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 HALI34 and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HALI34 and Palantir Technologies, you can compare the effects of market volatilities on HALI34 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 HALI34 with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of HALI34 and Palantir Technologies.

Diversification Opportunities for HALI34 and Palantir Technologies

0.88

Correlation Coefficient

HALI34  Palantir Technologies

Very poor diversification

The 3 months correlation between HALI34 and Palantir is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HALI34 and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and HALI34 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 HALI34 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 HALI34 i.e., HALI34 and Palantir Technologies go up and down completely randomly.

Pair Corralation between HALI34 and Palantir Technologies

Assuming the 90 days trading horizon HALI34 is expected to under-perform the Palantir Technologies. In addition to that, HALI34 is 1.28 times more volatile than Palantir Technologies. It trades about -0.16 of its total potential returns per unit of risk. Palantir Technologies is currently generating about 0.42 per unit of volatility. If you would invest  12,450  in Palantir Technologies on September 25, 2024 and sell it today you would earn a total of  4,282  from holding Palantir Technologies or generate 34.39% return on investment over 90 days.

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

HALI34  vs.  Palantir Technologies

HALI34

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HALI34 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, HALI34 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Palantir Technologies

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 30 (%) 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.

Pair Trading with HALI34 and Palantir Technologies

The main advantage of trading using opposite HALI34 and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HALI34 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 HALI34 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.