Correlation Between Seagate Technology and Indie Semiconductor

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

By analyzing existing cross correlation between Seagate Technology PLC and indie Semiconductor, you can compare the effects of market volatilities on Seagate Technology 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 Seagate Technology with a short position of Indie Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and Indie Semiconductor.

Diversification Opportunities for Seagate Technology and Indie Semiconductor

0.93

Correlation Coefficient

Seagate Technology  Indie Semiconductor

Almost no diversification

The 3 months correlation between Seagate and Indie is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology PLC and indie Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on indie Semiconductor and Seagate Technology 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 Seagate Technology PLC 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 Seagate Technology i.e., Seagate Technology and Indie Semiconductor go up and down completely randomly.

Pair Corralation between Seagate Technology and Indie Semiconductor

Considering the 90-day investment horizon Seagate Technology is expected to generate 1.36 times less return on investment than Indie Semiconductor. But when comparing it to its historical volatility, Seagate Technology PLC is 2.6 times less risky than Indie Semiconductor. It trades about 0.4 of its potential returns per unit of risk. indie Semiconductor is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  201.00  in indie Semiconductor on May 5, 2025 and sell it today you would earn a total of  173.00  from holding indie Semiconductor or generate 86.07% return on investment over 90 days.

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

Seagate Technology PLC  vs.  indie Semiconductor

Seagate Technology PLC

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Seagate Technology PLC are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Seagate Technology showed solid returns over the last few months and may actually be approaching a breakup point.

indie Semiconductor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Indie Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seagate Technology and Indie Semiconductor

The main advantage of trading using opposite Seagate Technology and Indie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagate Technology 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 Seagate Technology PLC and indie Semiconductor 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.