Correlation Between Palantir Technologies and PBG SA

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

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

Diversification Opportunities for Palantir Technologies and PBG SA

-0.86

Correlation Coefficient

Palantir Technologies  PBG SA

Pay attention - limited upside

The 3 months correlation between Palantir and PBG is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and PBG SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBG SA and Palantir Technologies 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 Palantir Technologies are associated (or correlated) with PBG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBG SA has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and PBG SA go up and down completely randomly.

Pair Corralation between Palantir Technologies and PBG SA

Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.27 times more return on investment than PBG SA. However, Palantir Technologies is 1.27 times more volatile than PBG SA. It trades about 0.38 of its potential returns per unit of risk. PBG SA is currently generating about -0.11 per unit of risk. If you would invest  6,753  in Palantir Technologies on September 30, 2024 and sell it today you would earn a total of  9,950  from holding Palantir Technologies or generate 147.34% return on investment over 90 days.

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

Palantir Technologies  vs.  PBG SA

Palantir Technologies

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 29 (%) 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.

PBG SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBG SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Palantir Technologies and PBG SA

The main advantage of trading using opposite Palantir Technologies and PBG SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, PBG SA 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 PBG SA will offset losses from the drop in PBG SA's long position.

The idea behind Palantir Technologies and PBG SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.