Correlation Between Veritone and Palantir Technologies

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

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

Diversification Opportunities for Veritone and Palantir Technologies

0.34

Correlation Coefficient

Veritone  Palantir Technologies

Weak diversification

The 3 months correlation between Veritone and Palantir is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Veritone and Palantir Technologies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Veritone 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 Veritone are associated (or correlated) with Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of Veritone i.e., Veritone and Palantir Technologies go up and down completely randomly.

Pair Corralation between Veritone and Palantir Technologies

Given the investment horizon of 90 days Veritone is expected to under-perform the Palantir Technologies. In addition to that, Veritone is 1.08 times more volatile than Palantir Technologies Class. It trades about -0.08 of its total potential returns per unit of risk. Palantir Technologies Class is currently generating about 0.06 per unit of volatility. If you would invest  7,718  in Palantir Technologies Class on December 30, 2024 and sell it today you would earn a total of  867.00  from holding Palantir Technologies Class or generate 11.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Veritone  vs.  Palantir Technologies Class

Veritone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veritone has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Palantir Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veritone and Palantir Technologies

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

The idea behind Veritone and Palantir Technologies Class 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.