Correlation Between Gold Fields and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and ON Semiconductor, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and ON Semiconductor.
Diversification Opportunities for Gold Fields and ON Semiconductor
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and ON Semiconductor is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and ON Semiconductor go up and down completely randomly.
Pair Corralation between Gold Fields and ON Semiconductor
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.06 times more return on investment than ON Semiconductor. However, Gold Fields is 1.06 times more volatile than ON Semiconductor. It trades about 0.02 of its potential returns per unit of risk. ON Semiconductor is currently generating about 0.01 per unit of risk. If you would invest 1,472 in Gold Fields Ltd on August 24, 2024 and sell it today you would earn a total of 54.00 from holding Gold Fields Ltd or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. ON Semiconductor
Performance |
| Timeline |
| Gold Fields |
| ON Semiconductor |
Gold Fields and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and ON Semiconductor
The main advantage of trading using opposite Gold Fields and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| ON Semiconductor vs. Eshallgo Class A | ON Semiconductor vs. Amtech Systems | ON Semiconductor vs. Gold Fields Ltd | ON Semiconductor vs. Aegean Airlines SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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