Correlation Between Indie Semiconductor and SCREEN Holdings

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

By analyzing existing cross correlation between indie Semiconductor and SCREEN Holdings Co, you can compare the effects of market volatilities on Indie Semiconductor and SCREEN Holdings 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 Indie Semiconductor with a short position of SCREEN Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indie Semiconductor and SCREEN Holdings.

Diversification Opportunities for Indie Semiconductor and SCREEN Holdings

-0.57

Correlation Coefficient

Indie Semiconductor  SCREEN Holdings

Excellent diversification

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

Pair Corralation between Indie Semiconductor and SCREEN Holdings

Given the investment horizon of 90 days indie Semiconductor is expected to generate 2.35 times more return on investment than SCREEN Holdings. However, Indie Semiconductor is 2.35 times more volatile than SCREEN Holdings Co. It trades about 0.06 of its potential returns per unit of risk. SCREEN Holdings Co is currently generating about -0.27 per unit of risk. If you would invest  358.00  in indie Semiconductor on September 22, 2024 and sell it today you would earn a total of  52.00  from holding indie Semiconductor or generate 14.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	21.88%
Values	Daily Returns

indie Semiconductor  vs.  SCREEN Holdings Co

indie Semiconductor

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Indie Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SCREEN Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCREEN Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Indie Semiconductor and SCREEN Holdings

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

The idea behind indie Semiconductor and SCREEN Holdings Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.