Correlation Between ON SEMICONDUCTOR and ASTRA INTERNATIONAL
Can any of the company-specific risk be diversified away by investing in both ON SEMICONDUCTOR and ASTRA INTERNATIONAL 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 ON SEMICONDUCTOR and ASTRA INTERNATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON SEMICONDUCTOR and ASTRA INTERNATIONAL, you can compare the effects of market volatilities on ON SEMICONDUCTOR and ASTRA INTERNATIONAL 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 ON SEMICONDUCTOR with a short position of ASTRA INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON SEMICONDUCTOR and ASTRA INTERNATIONAL.
Diversification Opportunities for ON SEMICONDUCTOR and ASTRA INTERNATIONAL
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between XS4 and ASTRA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ON SEMICONDUCTOR and ASTRA INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA INTERNATIONAL and ON SEMICONDUCTOR 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 ON SEMICONDUCTOR are associated (or correlated) with ASTRA INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA INTERNATIONAL has no effect on the direction of ON SEMICONDUCTOR i.e., ON SEMICONDUCTOR and ASTRA INTERNATIONAL go up and down completely randomly.
Pair Corralation between ON SEMICONDUCTOR and ASTRA INTERNATIONAL
Assuming the 90 days trading horizon ON SEMICONDUCTOR is expected to generate 1.54 times more return on investment than ASTRA INTERNATIONAL. However, ON SEMICONDUCTOR is 1.54 times more volatile than ASTRA INTERNATIONAL. It trades about -0.04 of its potential returns per unit of risk. ASTRA INTERNATIONAL is currently generating about -0.23 per unit of risk. If you would invest 6,461 in ON SEMICONDUCTOR on October 12, 2024 and sell it today you would lose (229.00) from holding ON SEMICONDUCTOR or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ON SEMICONDUCTOR vs. ASTRA INTERNATIONAL
Performance |
| Timeline |
| ON SEMICONDUCTOR |
| ASTRA INTERNATIONAL |
ON SEMICONDUCTOR and ASTRA INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON SEMICONDUCTOR and ASTRA INTERNATIONAL
The main advantage of trading using opposite ON SEMICONDUCTOR and ASTRA INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON SEMICONDUCTOR position performs unexpectedly, ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL will offset losses from the drop in ASTRA INTERNATIONAL's long position.| ON SEMICONDUCTOR vs. Thai Beverage Public | ON SEMICONDUCTOR vs. Canadian Utilities Limited | ON SEMICONDUCTOR vs. United Breweries Co | ON SEMICONDUCTOR vs. Tsingtao Brewery |
| ASTRA INTERNATIONAL vs. Gladstone Investment | ASTRA INTERNATIONAL vs. Nordic Semiconductor ASA | ASTRA INTERNATIONAL vs. ON SEMICONDUCTOR | ASTRA INTERNATIONAL vs. PennyMac Mortgage Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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