Correlation Between Palantir Technologies and SILEON AB

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

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

Diversification Opportunities for Palantir Technologies and SILEON AB

-0.03

Correlation Coefficient

Palantir Technologies  SILEON AB

Good diversification

The 3 months correlation between Palantir and SILEON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and SILEON AB ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILEON AB ON 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 SILEON AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILEON AB ON has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and SILEON AB go up and down completely randomly.

Pair Corralation between Palantir Technologies and SILEON AB

Assuming the 90 days horizon Palantir Technologies is expected to generate 0.65 times more return on investment than SILEON AB. However, Palantir Technologies is 1.54 times less risky than SILEON AB. It trades about 0.22 of its potential returns per unit of risk. SILEON AB ON is currently generating about -0.56 per unit of risk. If you would invest  6,823  in Palantir Technologies on October 6, 2024 and sell it today you would earn a total of  902.00  from holding Palantir Technologies or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Palantir Technologies  vs.  SILEON AB ON

Palantir Technologies

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

SILEON AB ON

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days SILEON AB ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, SILEON AB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palantir Technologies and SILEON AB

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

The idea behind Palantir Technologies and SILEON AB ON 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.