Correlation Between Indie Semiconductor and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both Indie Semiconductor and Ichor Holdings 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 Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between indie Semiconductor and Ichor Holdings, you can compare the effects of market volatilities on Indie Semiconductor and Ichor Holdings 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 Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indie Semiconductor and Ichor Holdings.
Diversification Opportunities for Indie Semiconductor and Ichor Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indie and Ichor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding indie Semiconductor and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings 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 Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of Indie Semiconductor i.e., Indie Semiconductor and Ichor Holdings go up and down completely randomly.
Pair Corralation between Indie Semiconductor and Ichor Holdings
Given the investment horizon of 90 days indie Semiconductor is expected to generate 3.41 times more return on investment than Ichor Holdings. However, Indie Semiconductor is 3.41 times more volatile than Ichor Holdings. It trades about 0.15 of its potential returns per unit of risk. Ichor Holdings is currently generating about 0.23 per unit of risk. If you would invest 344.00 in indie Semiconductor on August 24, 2024 and sell it today you would earn a total of 121.00 from holding indie Semiconductor or generate 35.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
indie Semiconductor vs. Ichor Holdings
Performance |
| Timeline |
| indie Semiconductor |
| Ichor Holdings |
Indie Semiconductor and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indie Semiconductor and Ichor Holdings
The main advantage of trading using opposite Indie Semiconductor and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indie Semiconductor position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| Indie Semiconductor vs. Axcelis Technologies | Indie Semiconductor vs. inTest | Indie Semiconductor vs. Lam Research Corp | Indie Semiconductor vs. Photronics |
| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Veeco Instruments | Ichor Holdings vs. Ultra Clean 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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