Correlation Between Palantir Technologies and Casio Computer

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

Diversification Opportunities for Palantir Technologies and Casio Computer

-0.88

Correlation Coefficient

Palantir Technologies  Casio Computer

Pay attention - limited upside

The 3 months correlation between Palantir and Casio is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Casio Computer go up and down completely randomly.

Pair Corralation between Palantir Technologies and Casio Computer

Given the investment horizon of 90 days Palantir Technologies Class is expected to generate 2.33 times more return on investment than Casio Computer. However, Palantir Technologies is 2.33 times more volatile than Casio Computer CoLtd. It trades about 0.14 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.02 per unit of risk. If you would invest  642.00  in Palantir Technologies Class on September 20, 2024 and sell it today you would earn a total of  6,882  from holding Palantir Technologies Class or generate 1071.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	28.23%
Values	Daily Returns

Palantir Technologies Class  vs.  Casio Computer CoLtd

Palantir Technologies

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 20 (%) 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.

Casio Computer CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casio Computer CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Casio Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Palantir Technologies and Casio Computer

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

The idea behind Palantir Technologies Class and Casio Computer CoLtd 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.