Correlation Between Palantir Technologies and Optimi Health

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

Diversification Opportunities for Palantir Technologies and Optimi Health

-0.57

Correlation Coefficient

Palantir Technologies  Optimi Health

Excellent diversification

The 3 months correlation between Palantir and Optimi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Palantir Technologies Class and Optimi Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimi Health Corp 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 Optimi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimi Health Corp has no effect on the direction of Palantir Technologies i.e., Palantir Technologies and Optimi Health go up and down completely randomly.

Pair Corralation between Palantir Technologies and Optimi Health

Given the investment horizon of 90 days Palantir Technologies Class is expected to generate 0.56 times more return on investment than Optimi Health. However, Palantir Technologies Class is 1.79 times less risky than Optimi Health. It trades about 0.29 of its potential returns per unit of risk. Optimi Health Corp is currently generating about -0.02 per unit of risk. If you would invest  3,645  in Palantir Technologies Class on September 17, 2024 and sell it today you would earn a total of  3,962  from holding Palantir Technologies Class or generate 108.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Palantir Technologies Class  vs.  Optimi Health Corp

Palantir Technologies

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Palantir Technologies Class are ranked lower than 23 (%) 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.

Optimi Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optimi Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Palantir Technologies and Optimi Health

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

The idea behind Palantir Technologies Class and Optimi Health Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.