Correlation Between GREENX METALS and ON SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and ON SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GREENX METALS LTD and ON SEMICONDUCTOR, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of ON SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and ON SEMICONDUCTOR.

Diversification Opportunities for GREENX METALS and ON SEMICONDUCTOR

0.12

Correlation Coefficient

GREENX METALS  ON SEMICONDUCTOR

Average diversification

The 3 months correlation between GREENX and XS4 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and ON SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON SEMICONDUCTOR and GREENX METALS 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 GREENX METALS 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 GREENX METALS i.e., GREENX METALS and ON SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between GREENX METALS and ON SEMICONDUCTOR

Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.62 times more return on investment than ON SEMICONDUCTOR. However, GREENX METALS is 1.62 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 0.0 per unit of risk. If you would invest  45.00  in GREENX METALS LTD on October 5, 2024 and sell it today you would lose (4.00) from holding GREENX METALS LTD or give up 8.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GREENX METALS LTD  vs.  ON SEMICONDUCTOR

GREENX METALS LTD

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GREENX METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, GREENX METALS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ON SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ON SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ON SEMICONDUCTOR is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GREENX METALS and ON SEMICONDUCTOR

The main advantage of trading using opposite GREENX METALS and ON SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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 GREENX METALS LTD 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.