Correlation Between Weyco and ON Semiconductor
Can any of the company-specific risk be diversified away by investing in both Weyco 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 Weyco and ON Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and ON Semiconductor, you can compare the effects of market volatilities on Weyco 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 Weyco with a short position of ON Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and ON Semiconductor.
Diversification Opportunities for Weyco and ON Semiconductor
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weyco and ON Semiconductor is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and Weyco 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 Weyco Group 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 Weyco i.e., Weyco and ON Semiconductor go up and down completely randomly.
Pair Corralation between Weyco and ON Semiconductor
Given the investment horizon of 90 days Weyco Group is expected to generate 2.1 times more return on investment than ON Semiconductor. However, Weyco is 2.1 times more volatile than ON Semiconductor. It trades about 0.1 of its potential returns per unit of risk. ON Semiconductor is currently generating about -0.03 per unit of risk. If you would invest 3,368 in Weyco Group on August 29, 2024 and sell it today you would earn a total of 297.00 from holding Weyco Group or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. ON Semiconductor
Performance |
| Timeline |
| Weyco Group |
| ON Semiconductor |
Weyco and ON Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and ON Semiconductor
The main advantage of trading using opposite Weyco and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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 Weyco Group 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. Texas Instruments Incorporated | ON Semiconductor vs. Microchip Technology | ON Semiconductor vs. Analog Devices | ON Semiconductor vs. Qorvo Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stocks Directory Find actively traded stocks across global markets |