Correlation Between Palantir TechnologiesInc and Stronghold Digital

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Palantir TechnologiesInc and Stronghold Digital 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 TechnologiesInc and Stronghold Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palantir TechnologiesInc and Stronghold Digital Mining, you can compare the effects of market volatilities on Palantir TechnologiesInc and Stronghold Digital 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 TechnologiesInc with a short position of Stronghold Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir TechnologiesInc and Stronghold Digital.

Diversification Opportunities for Palantir TechnologiesInc and Stronghold Digital

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Palantir and Stronghold is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Palantir TechnologiesInc and Stronghold Digital Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stronghold Digital Mining and Palantir TechnologiesInc 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 TechnologiesInc are associated (or correlated) with Stronghold Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stronghold Digital Mining has no effect on the direction of Palantir TechnologiesInc i.e., Palantir TechnologiesInc and Stronghold Digital go up and down completely randomly.

Pair Corralation between Palantir TechnologiesInc and Stronghold Digital

Given the investment horizon of 90 days Palantir TechnologiesInc is expected to generate 0.55 times more return on investment than Stronghold Digital. However, Palantir TechnologiesInc is 1.81 times less risky than Stronghold Digital. It trades about 0.05 of its potential returns per unit of risk. Stronghold Digital Mining is currently generating about -0.02 per unit of risk. If you would invest  1,270  in Palantir TechnologiesInc on December 29, 2023 and sell it today you would earn a total of  1,181  from holding Palantir TechnologiesInc or generate 92.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Palantir TechnologiesInc  vs.  Stronghold Digital Mining

 Performance 
       Timeline  
Palantir TechnologiesInc 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Palantir TechnologiesInc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Palantir TechnologiesInc reported solid returns over the last few months and may actually be approaching a breakup point.
Stronghold Digital Mining 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Stronghold Digital Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Palantir TechnologiesInc and Stronghold Digital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Palantir TechnologiesInc and Stronghold Digital

The main advantage of trading using opposite Palantir TechnologiesInc and Stronghold Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir TechnologiesInc position performs unexpectedly, Stronghold Digital 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 Stronghold Digital will offset losses from the drop in Stronghold Digital's long position.
The idea behind Palantir TechnologiesInc and Stronghold Digital Mining 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency