Correlation Between Palantir Technologies and BIONTECH

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

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

Diversification Opportunities for Palantir Technologies and BIONTECH

0.68

Correlation Coefficient

Palantir Technologies  BIONTECH

Poor diversification

The 3 months correlation between Palantir and BIONTECH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and BIONTECH go up and down completely randomly.

Pair Corralation between Palantir Technologies and BIONTECH

Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.48 times more return on investment than BIONTECH. However, Palantir Technologies is 1.48 times more volatile than BIONTECH SE DRN. It trades about 0.39 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.07 per unit of risk. If you would invest  6,681  in Palantir Technologies on September 27, 2024 and sell it today you would earn a total of  10,051  from holding Palantir Technologies or generate 150.44% return on investment over 90 days.

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

Palantir Technologies  vs.  BIONTECH SE DRN

Palantir Technologies

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Palantir Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

BIONTECH SE DRN

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BIONTECH SE DRN are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BIONTECH may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Palantir Technologies and BIONTECH

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

The idea behind Palantir Technologies and BIONTECH SE DRN 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.