Correlation Between CareMax and Indie Semiconductor
Can any of the company-specific risk be diversified away by investing in both CareMax 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 CareMax and Indie Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareMax and Indie Semiconductor Warrant, you can compare the effects of market volatilities on CareMax 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 CareMax with a short position of Indie Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and Indie Semiconductor.
Diversification Opportunities for CareMax and Indie Semiconductor
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between CareMax and Indie is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Indie Semiconductor Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indie Semiconductor and CareMax 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 CareMax 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 CareMax i.e., CareMax and Indie Semiconductor go up and down completely randomly.
Pair Corralation between CareMax and Indie Semiconductor
Assuming the 90 days horizon CareMax is expected to generate 22.53 times more return on investment than Indie Semiconductor. However, CareMax is 22.53 times more volatile than Indie Semiconductor Warrant. It trades about 0.13 of its potential returns per unit of risk. Indie Semiconductor Warrant is currently generating about 0.07 per unit of risk. If you would invest 58.00 in CareMax on September 14, 2024 and sell it today you would lose (57.04) from holding CareMax or give up 98.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.06% |
| Values | Daily Returns |
CareMax vs. Indie Semiconductor Warrant
Performance |
| Timeline |
| CareMax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Indie Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareMax and Indie Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareMax and Indie Semiconductor
The main advantage of trading using opposite CareMax and Indie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareMax 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 CareMax 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.| Indie Semiconductor vs. Nuvve Holding Corp | Indie Semiconductor vs. EVgo Equity Warrants | Indie Semiconductor vs. Paysafe Ltd Wt | Indie Semiconductor vs. Microvast Holdings |
Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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