Correlation Between Palantir Technologies and NetraMark Holdings

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

Diversification Opportunities for Palantir Technologies and NetraMark Holdings

0.9

Correlation Coefficient

Palantir Technologies  NetraMark Holdings

Almost no diversification

The 3 months correlation between Palantir and NetraMark is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and NetraMark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetraMark Holdings 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 NetraMark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetraMark Holdings has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and NetraMark Holdings go up and down completely randomly.

Pair Corralation between Palantir Technologies and NetraMark Holdings

Given the investment horizon of 90 days Palantir Technologies is expected to generate 2.79 times less return on investment than NetraMark Holdings. But when comparing it to its historical volatility, Palantir Technologies Class is 2.68 times less risky than NetraMark Holdings. It trades about 0.3 of its potential returns per unit of risk. NetraMark Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  11.00  in NetraMark Holdings on September 15, 2024 and sell it today you would earn a total of  62.00  from holding NetraMark Holdings or generate 563.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.97%
Values	Daily Returns

Palantir Technologies Class  vs.  NetraMark Holdings

Palantir Technologies

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

NetraMark Holdings

Risk-Adjusted Performance

24 of 100

Solid

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

Pair Trading with Palantir Technologies and NetraMark Holdings

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

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