Correlation Between Marqeta and Palantir Technologies

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

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

Diversification Opportunities for Marqeta and Palantir Technologies

-0.68

Correlation Coefficient

Marqeta  Palantir Technologies

Excellent diversification

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

Pair Corralation between Marqeta and Palantir Technologies

Allowing for the 90-day total investment horizon Marqeta is expected to under-perform the Palantir Technologies. In addition to that, Marqeta is 1.73 times more volatile than Palantir Technologies. It trades about -0.06 of its total potential returns per unit of risk. Palantir Technologies is currently generating about 0.37 per unit of volatility. If you would invest  4,270  in Palantir Technologies on August 20, 2024 and sell it today you would earn a total of  2,307  from holding Palantir Technologies or generate 54.03% return on investment over 90 days.

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

Marqeta  vs.  Palantir Technologies

Marqeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marqeta has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Palantir Technologies

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marqeta and Palantir Technologies

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

The idea behind Marqeta and Palantir Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.