Correlation Between Indie Semiconductor and Wisekey International

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

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

Diversification Opportunities for Indie Semiconductor and Wisekey International

0.16

Correlation Coefficient

Indie Semiconductor  Wisekey International

Average diversification

The 3 months correlation between Indie and Wisekey is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding indie Semiconductor and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Indie Semiconductor i.e., Indie Semiconductor and Wisekey International go up and down completely randomly.

Pair Corralation between Indie Semiconductor and Wisekey International

Given the investment horizon of 90 days indie Semiconductor is expected to under-perform the Wisekey International. But the stock apears to be less risky and, when comparing its historical volatility, indie Semiconductor is 2.04 times less risky than Wisekey International. The stock trades about -0.01 of its potential returns per unit of risk. The Wisekey International Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  148.00  in Wisekey International Holding on December 7, 2024 and sell it today you would earn a total of  351.00  from holding Wisekey International Holding or generate 237.16% return on investment over 90 days.

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

indie Semiconductor  vs.  Wisekey International Holding

indie Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days indie Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Wisekey International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wisekey International Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Wisekey International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Indie Semiconductor and Wisekey International

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

The idea behind indie Semiconductor and Wisekey International Holding 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.