Correlation Between Ford and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ON Semiconductor, you can compare the effects of market volatilities on Ford 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 Ford with a short position of ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ON Semiconductor.
Diversification Opportunities for Ford and ON Semiconductor
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and O2NS34 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and Ford 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 Ford Motor 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 Ford i.e., Ford and ON Semiconductor go up and down completely randomly.
Pair Corralation between Ford and ON Semiconductor
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.97 times more return on investment than ON Semiconductor. However, Ford Motor is 1.03 times less risky than ON Semiconductor. It trades about 0.14 of its potential returns per unit of risk. ON Semiconductor is currently generating about 0.1 per unit of risk. If you would invest 1,161 in Ford Motor on October 16, 2025 and sell it today you would earn a total of 223.00 from holding Ford Motor or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.16% |
| Values | Daily Returns |
Ford Motor vs. ON Semiconductor
Performance |
| Timeline |
| Ford Motor |
| ON Semiconductor |
Ford and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ON Semiconductor
The main advantage of trading using opposite Ford and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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. Metalurgica Gerdau SA | ON Semiconductor vs. American Airlines Group | ON Semiconductor vs. Martin Marietta Materials | ON Semiconductor vs. JB Hunt Transport |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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