Correlation Between Palantir Technologies and China Gas

Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and China Gas 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 China Gas 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 China Gas Holdings, you can compare the effects of market volatilities on Palantir Technologies and China Gas 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 China Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and China Gas.

Diversification Opportunities for Palantir Technologies and China Gas

-0.36

Correlation Coefficient

Palantir Technologies  China Gas

Very good diversification

The 3 months correlation between Palantir and China is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and China Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gas Holdings 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 China Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gas Holdings has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and China Gas go up and down completely randomly.

Pair Corralation between Palantir Technologies and China Gas

If you would invest  7,246  in Palantir Technologies Class on October 9, 2024 and sell it today you would earn a total of  346.00  from holding Palantir Technologies Class or generate 4.78% 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.  China Gas Holdings

Palantir Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 17 (%) 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.

China Gas Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Gas Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, China Gas may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Palantir Technologies and China Gas

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

The idea behind Palantir Technologies Class and China Gas 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 CEOs Directory module to screen CEOs from public companies around the world.