Correlation Between ON SEMICONDUCTOR and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both ON SEMICONDUCTOR and Citic Telecom 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 Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON SEMICONDUCTOR and Citic Telecom International, you can compare the effects of market volatilities on ON SEMICONDUCTOR and Citic Telecom 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 Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON SEMICONDUCTOR and Citic Telecom.
Diversification Opportunities for ON SEMICONDUCTOR and Citic Telecom
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between XS4 and Citic is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ON SEMICONDUCTOR and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern 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 Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of ON SEMICONDUCTOR i.e., ON SEMICONDUCTOR and Citic Telecom go up and down completely randomly.
Pair Corralation between ON SEMICONDUCTOR and Citic Telecom
Assuming the 90 days trading horizon ON SEMICONDUCTOR is expected to under-perform the Citic Telecom. But the stock apears to be less risky and, when comparing its historical volatility, ON SEMICONDUCTOR is 1.19 times less risky than Citic Telecom. The stock trades about -0.4 of its potential returns per unit of risk. The Citic Telecom International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Citic Telecom International on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Citic Telecom International or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
ON SEMICONDUCTOR vs. Citic Telecom International
Performance |
| Timeline |
| ON SEMICONDUCTOR |
| Citic Telecom Intern |
ON SEMICONDUCTOR and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON SEMICONDUCTOR and Citic Telecom
The main advantage of trading using opposite ON SEMICONDUCTOR and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON SEMICONDUCTOR position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| ON SEMICONDUCTOR vs. RCI Hospitality Holdings | ON SEMICONDUCTOR vs. Verizon Communications | ON SEMICONDUCTOR vs. EPSILON HEALTHCARE LTD | ON SEMICONDUCTOR vs. Planet Fitness |
| Citic Telecom vs. Ebro Foods SA | Citic Telecom vs. MHP Hotel AG | Citic Telecom vs. MELIA HOTELS | Citic Telecom vs. Dalata Hotel Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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