Correlation Between Palantir Technologies and Lupatech

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

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

Diversification Opportunities for Palantir Technologies and Lupatech

-0.64

Correlation Coefficient

Palantir Technologies  Lupatech

Excellent diversification

The 3 months correlation between Palantir and Lupatech is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Lupatech go up and down completely randomly.

Pair Corralation between Palantir Technologies and Lupatech

Assuming the 90 days trading horizon Palantir Technologies is expected to generate 1.12 times more return on investment than Lupatech. However, Palantir Technologies is 1.12 times more volatile than Lupatech SA. It trades about 0.14 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.03 per unit of risk. If you would invest  1,072  in Palantir Technologies on September 12, 2024 and sell it today you would earn a total of  13,645  from holding Palantir Technologies or generate 1272.85% return on investment over 90 days.

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

Palantir Technologies  vs.  Lupatech SA

Palantir Technologies

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 27 (%) 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.

Lupatech SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Palantir Technologies and Lupatech

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

The idea behind Palantir Technologies and Lupatech SA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.