Correlation Between Indie Semiconductor and Algoma Steel

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

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

Diversification Opportunities for Indie Semiconductor and Algoma Steel

0.0

Correlation Coefficient

Indie Semiconductor  Algoma Steel

Pay attention - limited upside

The 3 months correlation between Indie and Algoma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indie Semiconductor Warrant and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group 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 Warrant are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Indie Semiconductor i.e., Indie Semiconductor and Algoma Steel go up and down completely randomly.

Pair Corralation between Indie Semiconductor and Algoma Steel

If you would invest (100.00) in Indie Semiconductor Warrant on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Indie Semiconductor Warrant or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Indie Semiconductor Warrant  vs.  Algoma Steel Group

Indie Semiconductor

Risk-Adjusted Performance

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.

Algoma Steel Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algoma Steel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Indie Semiconductor and Algoma Steel

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

The idea behind Indie Semiconductor Warrant and Algoma Steel Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .