Correlation Between Palantir Technologies and Bayport International

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

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

Diversification Opportunities for Palantir Technologies and Bayport International

-0.25

Correlation Coefficient

Palantir Technologies  Bayport International

Very good diversification

The 3 months correlation between Palantir and Bayport is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Bayport International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayport International 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 Class are associated (or correlated) with Bayport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayport International has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Bayport International go up and down completely randomly.

Pair Corralation between Palantir Technologies and Bayport International

If you would invest  6,639  in Palantir Technologies Class on December 1, 2024 and sell it today you would earn a total of  1,838  from holding Palantir Technologies Class or generate 27.68% return on investment over 90 days.

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

Palantir Technologies Class  vs.  Bayport International Holdings

Palantir Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 8 (%) 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.

Bayport International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bayport International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Bayport International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Palantir Technologies and Bayport International

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

The idea behind Palantir Technologies Class and Bayport International Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.