Correlation Between CiT and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both CiT and ON 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 CiT and ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CiT Inc and ON Semiconductor, you can compare the effects of market volatilities on CiT and ON 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 CiT with a short position of ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CiT and ON Semiconductor.
Diversification Opportunities for CiT and ON Semiconductor
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CiT and O2NS34 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CiT Inc and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and CiT 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 CiT Inc are associated (or correlated) with ON Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON Semiconductor has no effect on the direction of CiT i.e., CiT and ON Semiconductor go up and down completely randomly.
Pair Corralation between CiT and ON Semiconductor
Given the investment horizon of 90 days CiT is expected to generate 2.22 times less return on investment than ON Semiconductor. In addition to that, CiT is 1.21 times more volatile than ON Semiconductor. It trades about 0.07 of its total potential returns per unit of risk. ON Semiconductor is currently generating about 0.18 per unit of volatility. If you would invest 3,230 in ON Semiconductor on November 9, 2025 and sell it today you would earn a total of 887.00 from holding ON Semiconductor or generate 27.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
CiT Inc vs. ON Semiconductor
Performance |
| Timeline |
| CiT Inc |
| ON Semiconductor |
CiT and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CiT and ON Semiconductor
The main advantage of trading using opposite CiT and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CiT position performs unexpectedly, ON 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 ON Semiconductor will offset losses from the drop in ON Semiconductor's long position.The idea behind CiT Inc and ON 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.| ON Semiconductor vs. Taiwan Semiconductor Manufacturing | ON Semiconductor vs. Apple Inc | ON Semiconductor vs. Alibaba Group Holding | ON Semiconductor vs. Microsoft |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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