Correlation Between Palladyne and Optimum Small

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

By analyzing existing cross correlation between Palladyne AI Corp and Optimum Small Mid Cap, you can compare the effects of market volatilities on Palladyne and Optimum Small 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 Palladyne with a short position of Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palladyne and Optimum Small.

Diversification Opportunities for Palladyne and Optimum Small

0.62

Correlation Coefficient

Palladyne  Optimum Small

Poor diversification

The 3 months correlation between Palladyne and Optimum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Palladyne AI Corp and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid and Palladyne 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 Palladyne AI Corp are associated (or correlated) with Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Palladyne i.e., Palladyne and Optimum Small go up and down completely randomly.

Pair Corralation between Palladyne and Optimum Small

Given the investment horizon of 90 days Palladyne AI Corp is expected to generate 7.57 times more return on investment than Optimum Small. However, Palladyne is 7.57 times more volatile than Optimum Small Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about 0.18 per unit of risk. If you would invest  585.00  in Palladyne AI Corp on May 6, 2025 and sell it today you would earn a total of  207.00  from holding Palladyne AI Corp or generate 35.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Palladyne AI Corp  vs.  Optimum Small Mid Cap

Palladyne AI Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Palladyne AI Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Palladyne displayed solid returns over the last few months and may actually be approaching a breakup point.

Optimum Small Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Optimum Small Mid Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Optimum Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Palladyne and Optimum Small

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

The idea behind Palladyne AI Corp and Optimum Small Mid Cap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.