Correlation Between Palantir Technologies and Ladybug Resource

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

Diversification Opportunities for Palantir Technologies and Ladybug Resource

-0.83

Correlation Coefficient

Palantir Technologies  Ladybug Resource

Pay attention - limited upside

The 3 months correlation between Palantir and Ladybug is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Ladybug Resource Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladybug Resource 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 Ladybug Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladybug Resource has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Ladybug Resource go up and down completely randomly.

Pair Corralation between Palantir Technologies and Ladybug Resource

Given the investment horizon of 90 days Palantir Technologies is expected to generate 1.92 times less return on investment than Ladybug Resource. But when comparing it to its historical volatility, Palantir Technologies Class is 3.47 times less risky than Ladybug Resource. It trades about 0.12 of its potential returns per unit of risk. Ladybug Resource Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.60  in Ladybug Resource Group on September 30, 2024 and sell it today you would earn a total of  0.10  from holding Ladybug Resource Group or generate 16.67% return on investment over 90 days.

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

Palantir Technologies Class  vs.  Ladybug Resource Group

Palantir Technologies

Risk-Adjusted Performance

22 of 100

Solid

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

Ladybug Resource

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladybug Resource Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ladybug Resource is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Palantir Technologies and Ladybug Resource

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

The idea behind Palantir Technologies Class and Ladybug Resource Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.