Correlation Between STAG Industrial, and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both STAG Industrial, 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 STAG Industrial, and ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial, and ON Semiconductor, you can compare the effects of market volatilities on STAG Industrial, 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 STAG Industrial, with a short position of ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial, and ON Semiconductor.
Diversification Opportunities for STAG Industrial, and ON Semiconductor
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STAG and O2NS34 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial, and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and STAG Industrial, 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 STAG Industrial, 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 STAG Industrial, i.e., STAG Industrial, and ON Semiconductor go up and down completely randomly.
Pair Corralation between STAG Industrial, and ON Semiconductor
Assuming the 90 days trading horizon STAG Industrial, is expected to generate 0.62 times more return on investment than ON Semiconductor. However, STAG Industrial, is 1.62 times less risky than ON Semiconductor. It trades about -0.11 of its potential returns per unit of risk. ON Semiconductor is currently generating about -0.37 per unit of risk. If you would invest 4,144 in STAG Industrial, on November 4, 2024 and sell it today you would lose (177.00) from holding STAG Industrial, or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial, vs. ON Semiconductor
Performance |
| Timeline |
| STAG Industrial, |
| ON Semiconductor |
STAG Industrial, and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial, and ON Semiconductor
The main advantage of trading using opposite STAG Industrial, and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial, 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.| STAG Industrial, vs. Taiwan Semiconductor Manufacturing | STAG Industrial, vs. Apple Inc | STAG Industrial, vs. Alibaba Group Holding | STAG Industrial, vs. Microsoft |
| ON Semiconductor vs. Hormel Foods | ON Semiconductor vs. MAHLE Metal Leve | ON Semiconductor vs. Multilaser Industrial SA | ON Semiconductor vs. Clover Health Investments, |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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