Correlation Between Palantir Technologies and Network International

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

Diversification Opportunities for Palantir Technologies and Network International

0.0

Correlation Coefficient

Palantir Technologies  Network International

Pay attention - limited upside

The 3 months correlation between Palantir and Network is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Network International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 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 Network International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network International has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Network International go up and down completely randomly.

Pair Corralation between Palantir Technologies and Network International

If you would invest  6,985  in Palantir Technologies Class on December 4, 2024 and sell it today you would earn a total of  1,357  from holding Palantir Technologies Class or generate 19.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Palantir Technologies Class  vs.  Network International Holdings

Palantir Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 6 (%) 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.

Network International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Network International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Network International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Palantir Technologies and Network International

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

The idea behind Palantir Technologies Class and Network 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.