Correlation Between Palantir Technologies and First Republic

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

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

Diversification Opportunities for Palantir Technologies and First Republic

0.0

Correlation Coefficient

Palantir Technologies  First Republic

Pay attention - limited upside

The 3 months correlation between Palantir and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and First Republic go up and down completely randomly.

Pair Corralation between Palantir Technologies and First Republic

If you would invest  197,663  in Palantir Technologies on April 23, 2025 and sell it today you would earn a total of  85,607  from holding Palantir Technologies or generate 43.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Palantir Technologies  vs.  First Republic Bank

Palantir Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Palantir Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

First Republic Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Republic Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, First Republic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Palantir Technologies and First Republic

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

The idea behind Palantir Technologies and First Republic Bank 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.