Correlation Between Palantir Technologies and Goliath Resources

Can any of the company-specific risk be diversified away by investing in both Palantir Technologies and Goliath 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 Goliath 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 Goliath Resources Limited, you can compare the effects of market volatilities on Palantir Technologies and Goliath 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 Goliath Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palantir Technologies and Goliath Resources.

Diversification Opportunities for Palantir Technologies and Goliath Resources

0.86

Correlation Coefficient

Palantir Technologies  Goliath Resources

Very poor diversification

The 3 months correlation between Palantir and Goliath is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Goliath Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath 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 Goliath Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Resources has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Goliath Resources go up and down completely randomly.

Pair Corralation between Palantir Technologies and Goliath Resources

Given the investment horizon of 90 days Palantir Technologies is expected to generate 2.18 times less return on investment than Goliath Resources. But when comparing it to its historical volatility, Palantir Technologies Class is 1.23 times less risky than Goliath Resources. It trades about 0.11 of its potential returns per unit of risk. Goliath Resources Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  82.00  in Goliath Resources Limited on November 29, 2024 and sell it today you would earn a total of  73.00  from holding Goliath Resources Limited or generate 89.02% return on investment over 90 days.

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

Palantir Technologies Class  vs.  Goliath Resources Limited

Palantir Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Palantir Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Goliath Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goliath Resources Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Goliath Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palantir Technologies and Goliath Resources

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

The idea behind Palantir Technologies Class and Goliath Resources Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.