Correlation Between Palladyne and PBF Energy

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

Diversification Opportunities for Palladyne and PBF Energy

0.54

Correlation Coefficient

Palladyne  PBF Energy

Very weak diversification

The 3 months correlation between Palladyne and PBF is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Palladyne AI Corp and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy 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 PBF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBF Energy has no effect on the direction of Palladyne i.e., Palladyne and PBF Energy go up and down completely randomly.

Pair Corralation between Palladyne and PBF Energy

Given the investment horizon of 90 days Palladyne AI Corp is expected to generate 1.89 times more return on investment than PBF Energy. However, Palladyne is 1.89 times more volatile than PBF Energy. It trades about 0.12 of its potential returns per unit of risk. PBF Energy is currently generating about 0.12 per unit of risk. If you would invest  568.00  in Palladyne AI Corp on May 7, 2025 and sell it today you would earn a total of  284.00  from holding Palladyne AI Corp or generate 50.0% return on investment over 90 days.

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

Palladyne AI Corp  vs.  PBF Energy

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 9 (%) 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.

PBF Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PBF Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental drivers, PBF Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Palladyne and PBF Energy

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

The idea behind Palladyne AI Corp and PBF Energy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.