Correlation Between ON Semiconductor and Lumen Technologies,

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

By analyzing existing cross correlation between ON Semiconductor and Lumen Technologies,, you can compare the effects of market volatilities on ON Semiconductor and Lumen Technologies, 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 Lumen Technologies,. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON Semiconductor and Lumen Technologies,.

Diversification Opportunities for ON Semiconductor and Lumen Technologies,

0.82

Correlation Coefficient

ON Semiconductor  Lumen Technologies,

Very poor diversification

The 3 months correlation between O2NS34 and Lumen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, 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 Lumen Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies, has no effect on the direction of ON Semiconductor i.e., ON Semiconductor and Lumen Technologies, go up and down completely randomly.

Pair Corralation between ON Semiconductor and Lumen Technologies,

Assuming the 90 days trading horizon ON Semiconductor is expected to under-perform the Lumen Technologies,. But the stock apears to be less risky and, when comparing its historical volatility, ON Semiconductor is 1.38 times less risky than Lumen Technologies,. The stock trades about -0.24 of its potential returns per unit of risk. The Lumen Technologies, is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,612  in Lumen Technologies, on December 23, 2024 and sell it today you would lose (784.00) from holding Lumen Technologies, or give up 21.71% of portfolio value over 90 days.

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

ON Semiconductor  vs.  Lumen Technologies,

ON Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days ON Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lumen Technologies,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumen Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ON Semiconductor and Lumen Technologies,

The main advantage of trading using opposite ON Semiconductor and Lumen Technologies, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON Semiconductor position performs unexpectedly, Lumen Technologies, 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 Lumen Technologies, will offset losses from the drop in Lumen Technologies,'s long position.

The idea behind ON Semiconductor and Lumen Technologies, 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.