Correlation Between Internet Infinity and Palantir Technologies

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

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

Diversification Opportunities for Internet Infinity and Palantir Technologies

-0.62

Correlation Coefficient

Internet Infinity  Palantir Technologies

Excellent diversification

The 3 months correlation between Internet and Palantir is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Internet Infinity and Palantir Technologies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Internet Infinity 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 Internet Infinity 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 Internet Infinity i.e., Internet Infinity and Palantir Technologies go up and down completely randomly.

Pair Corralation between Internet Infinity and Palantir Technologies

Given the investment horizon of 90 days Internet Infinity is expected to generate 0.65 times more return on investment than Palantir Technologies. However, Internet Infinity is 1.53 times less risky than Palantir Technologies. It trades about 0.21 of its potential returns per unit of risk. Palantir Technologies Class is currently generating about -0.03 per unit of risk. If you would invest  0.95  in Internet Infinity on October 11, 2024 and sell it today you would earn a total of  0.11  from holding Internet Infinity or generate 11.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Internet Infinity  vs.  Palantir Technologies Class

Internet Infinity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Palantir Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 14 (%) 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 Internet Infinity and Palantir Technologies

The main advantage of trading using opposite Internet Infinity and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Infinity 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 Internet Infinity 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 Global Correlations module to find global opportunities by holding instruments from different markets.