Correlation Between Palantir Technologies and Santos Brasil

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

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

Diversification Opportunities for Palantir Technologies and Santos Brasil

-0.02

Correlation Coefficient

Palantir Technologies  Santos Brasil

Good diversification

The 3 months correlation between Palantir and Santos is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Santos Brasil Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos Brasil Participaes 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 Santos Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos Brasil Participaes has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Santos Brasil go up and down completely randomly.

Pair Corralation between Palantir Technologies and Santos Brasil

Assuming the 90 days trading horizon Palantir Technologies is expected to generate 18.27 times more return on investment than Santos Brasil. However, Palantir Technologies is 18.27 times more volatile than Santos Brasil Participaes. It trades about 0.04 of its potential returns per unit of risk. Santos Brasil Participaes is currently generating about 0.18 per unit of risk. If you would invest  16,703  in Palantir Technologies on December 27, 2024 and sell it today you would earn a total of  716.00  from holding Palantir Technologies or generate 4.29% return on investment over 90 days.

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

Palantir Technologies  vs.  Santos Brasil Participaes

Palantir Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 3 (%) 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.

Santos Brasil Participaes

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Santos Brasil Participaes are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Santos Brasil is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Palantir Technologies and Santos Brasil

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

The idea behind Palantir Technologies and Santos Brasil Participaes 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.