Correlation Between Rigetti Computing and Palantir Technologies

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

By analyzing existing cross correlation between Rigetti Computing and Palantir Technologies Class, you can compare the effects of market volatilities on Rigetti Computing 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 Rigetti Computing with a short position of Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rigetti Computing and Palantir Technologies.

Diversification Opportunities for Rigetti Computing and Palantir Technologies

0.74

Correlation Coefficient

Rigetti Computing  Palantir Technologies

Poor diversification

The 3 months correlation between Rigetti and Palantir is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Rigetti Computing and Palantir Technologies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies and Rigetti Computing 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 Rigetti Computing 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 Rigetti Computing i.e., Rigetti Computing and Palantir Technologies go up and down completely randomly.

Pair Corralation between Rigetti Computing and Palantir Technologies

Given the investment horizon of 90 days Rigetti Computing is expected to generate 4.94 times more return on investment than Palantir Technologies. However, Rigetti Computing is 4.94 times more volatile than Palantir Technologies Class. It trades about 0.46 of its potential returns per unit of risk. Palantir Technologies Class is currently generating about 0.26 per unit of risk. If you would invest  120.00  in Rigetti Computing on October 7, 2024 and sell it today you would earn a total of  1,782  from holding Rigetti Computing or generate 1485.0% return on investment over 90 days.

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

Rigetti Computing  vs.  Palantir Technologies Class

Rigetti Computing

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Palantir Technologies

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 21 (%) 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.

Pair Trading with Rigetti Computing and Palantir Technologies

The main advantage of trading using opposite Rigetti Computing and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigetti Computing 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.

The idea behind Rigetti Computing and Palantir Technologies Class 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.