Correlation Between Indie Semiconductor and Peraso

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

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

Diversification Opportunities for Indie Semiconductor and Peraso

-0.65

Correlation Coefficient

Indie Semiconductor  Peraso

Excellent diversification

The 3 months correlation between Indie and Peraso is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding indie Semiconductor and Peraso Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peraso Inc 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 Peraso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peraso Inc has no effect on the direction of Indie Semiconductor i.e., Indie Semiconductor and Peraso go up and down completely randomly.

Pair Corralation between Indie Semiconductor and Peraso

Given the investment horizon of 90 days Indie Semiconductor is expected to generate 4.29 times less return on investment than Peraso. But when comparing it to its historical volatility, indie Semiconductor is 2.58 times less risky than Peraso. It trades about 0.07 of its potential returns per unit of risk. Peraso Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Peraso Inc on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Peraso Inc or generate 15.56% return on investment over 90 days.

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

indie Semiconductor  vs.  Peraso Inc

indie Semiconductor

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Indie Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Peraso Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peraso Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Indie Semiconductor and Peraso

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

The idea behind indie Semiconductor and Peraso Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.