Correlation Between Rush Street and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both Rush Street 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 Rush Street and Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Street Interactive and Palantir Technologies, you can compare the effects of market volatilities on Rush Street 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 Rush Street with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Street and Palantir Technologies.
Diversification Opportunities for Rush Street and Palantir Technologies
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rush and Palantir is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rush Street Interactive and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Rush Street 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 Rush Street Interactive 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 Rush Street i.e., Rush Street and Palantir Technologies go up and down completely randomly.
Pair Corralation between Rush Street and Palantir Technologies
Considering the 90-day investment horizon Rush Street is expected to generate 1.96 times less return on investment than Palantir Technologies. But when comparing it to its historical volatility, Rush Street Interactive is 1.5 times less risky than Palantir Technologies. It trades about 0.29 of its potential returns per unit of risk. Palantir Technologies is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 8,240 in Palantir Technologies on August 25, 2024 and sell it today you would earn a total of 4,125 from holding Palantir Technologies or generate 50.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Rush Street Interactive vs. Palantir Technologies
Performance |
| Timeline |
| Rush Street Interactive |
| Palantir Technologies |
Rush Street and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Street and Palantir Technologies
The main advantage of trading using opposite Rush Street and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Street 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.| Rush Street vs. Genius Sports | Rush Street vs. Gan | Rush Street vs. Ballys Corp | Rush Street vs. Hims Hers Health |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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