Correlation Between ON Semiconductor and NORTHWELL

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

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

Diversification Opportunities for ON Semiconductor and NORTHWELL

0.37

Correlation Coefficient

ON Semiconductor  NORTHWELL

Weak diversification

The 3 months correlation between ON Semiconductor and NORTHWELL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and NORTHWELL HEALTHCARE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHWELL HEALTHCARE INC 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 NORTHWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHWELL HEALTHCARE INC has no effect on the direction of ON Semiconductor i.e., ON Semiconductor and NORTHWELL go up and down completely randomly.

Pair Corralation between ON Semiconductor and NORTHWELL

Allowing for the 90-day total investment horizon ON Semiconductor is expected to under-perform the NORTHWELL. In addition to that, ON Semiconductor is 1.73 times more volatile than NORTHWELL HEALTHCARE INC. It trades about -0.27 of its total potential returns per unit of risk. NORTHWELL HEALTHCARE INC is currently generating about 0.2 per unit of volatility. If you would invest  8,029  in NORTHWELL HEALTHCARE INC on October 20, 2024 and sell it today you would earn a total of  387.00  from holding NORTHWELL HEALTHCARE INC or generate 4.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.0%
Values	Daily Returns

ON Semiconductor  vs.  NORTHWELL HEALTHCARE INC

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NORTHWELL HEALTHCARE INC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHWELL HEALTHCARE INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NORTHWELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ON Semiconductor and NORTHWELL

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

The idea behind ON Semiconductor and NORTHWELL HEALTHCARE INC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.