Correlation Between Palantir Technologies and ROK Resources
Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and ROK Resources 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 ROK Resources 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 ROK Resources, you can compare the effects of market volatilities on Palantir Technologies and ROK Resources 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 ROK Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and ROK Resources.
Diversification Opportunities for Palantir Technologies and ROK Resources
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Palantir and ROK is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and ROK Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROK Resources 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 ROK Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROK Resources has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and ROK Resources go up and down completely randomly.
Pair Corralation between Palantir Technologies and ROK Resources
Given the investment horizon of 90 days Palantir Technologies Class is expected to generate 1.46 times more return on investment than ROK Resources. However, Palantir Technologies is 1.46 times more volatile than ROK Resources. It trades about 0.13 of its potential returns per unit of risk. ROK Resources is currently generating about 0.1 per unit of risk. If you would invest 7,544 in Palantir Technologies Class on November 28, 2024 and sell it today you would earn a total of 1,240 from holding Palantir Technologies Class or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palantir Technologies Class vs. ROK Resources
Performance |
| Timeline |
| Palantir Technologies |
| ROK Resources |
Palantir Technologies and ROK Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palantir Technologies and ROK Resources
The main advantage of trading using opposite Palantir Technologies and ROK Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palantir Technologies position performs unexpectedly, ROK Resources 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 ROK Resources will offset losses from the drop in ROK Resources' long position.| Palantir Technologies vs. Palo Alto Networks | Palantir Technologies vs. Adobe Systems Incorporated | Palantir Technologies vs. Crowdstrike Holdings | Palantir Technologies vs. Zscaler |
| ROK Resources vs. Alto Neuroscience, | ROK Resources vs. Kingdee International Software | ROK Resources vs. Western Digital | ROK Resources vs. Where Food Comes |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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