Correlation Between SCREEN Holdings and Indie Semiconductor

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

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

Diversification Opportunities for SCREEN Holdings and Indie Semiconductor

-0.45

Correlation Coefficient

SCREEN Holdings  Indie Semiconductor

Very good diversification

The 3 months correlation between SCREEN and Indie is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SCREEN Holdings Co and indie Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on indie Semiconductor and SCREEN Holdings 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 SCREEN Holdings Co 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 SCREEN Holdings i.e., SCREEN Holdings and Indie Semiconductor go up and down completely randomly.

Pair Corralation between SCREEN Holdings and Indie Semiconductor

Assuming the 90 days horizon SCREEN Holdings Co is expected to under-perform the Indie Semiconductor. But the otc stock apears to be less risky and, when comparing its historical volatility, SCREEN Holdings Co is 1.26 times less risky than Indie Semiconductor. The otc stock trades about -0.61 of its potential returns per unit of risk. The indie Semiconductor is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  397.00  in indie Semiconductor on October 6, 2024 and sell it today you would earn a total of  62.00  from holding indie Semiconductor or generate 15.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	25.0%
Values	Daily Returns

SCREEN Holdings Co  vs.  indie Semiconductor

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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

indie Semiconductor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 5 (%) 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.

Pair Trading with SCREEN Holdings and Indie Semiconductor

The main advantage of trading using opposite SCREEN Holdings and Indie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCREEN Holdings 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 SCREEN Holdings Co and indie Semiconductor 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.