Correlation Between Ouster and Indie Semiconductor

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

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

Diversification Opportunities for Ouster and Indie Semiconductor

-0.13

Correlation Coefficient

Ouster  Indie Semiconductor

Good diversification

The 3 months correlation between Ouster and Indie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ouster Inc and Indie Semiconductor Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indie Semiconductor and Ouster 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 Ouster Inc are associated (or correlated) with Indie Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indie Semiconductor has no effect on the direction of Ouster i.e., Ouster and Indie Semiconductor go up and down completely randomly.

Pair Corralation between Ouster and Indie Semiconductor

If you would invest  5.60  in Ouster Inc on September 25, 2024 and sell it today you would earn a total of  3.40  from holding Ouster Inc or generate 60.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Ouster Inc  vs.  Indie Semiconductor Warrant

Ouster Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ouster Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ouster unveiled solid returns over the last few months and may actually be approaching a breakup point.

Indie Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indie Semiconductor Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Indie Semiconductor is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ouster and Indie Semiconductor

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

The idea behind Ouster Inc and Indie Semiconductor Warrant 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.