Correlation Between ON SEMICONDUCTOR and ZINC MEDIA

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

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

Diversification Opportunities for ON SEMICONDUCTOR and ZINC MEDIA

-0.85

Correlation Coefficient

ON SEMICONDUCTOR  ZINC MEDIA

Pay attention - limited upside

The 3 months correlation between XS4 and ZINC is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding ON SEMICONDUCTOR and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of ON SEMICONDUCTOR i.e., ON SEMICONDUCTOR and ZINC MEDIA go up and down completely randomly.

Pair Corralation between ON SEMICONDUCTOR and ZINC MEDIA

Assuming the 90 days trading horizon ON SEMICONDUCTOR is expected to under-perform the ZINC MEDIA. In addition to that, ON SEMICONDUCTOR is 2.48 times more volatile than ZINC MEDIA GR. It trades about -0.19 of its total potential returns per unit of risk. ZINC MEDIA GR is currently generating about 0.15 per unit of volatility. If you would invest  70.00  in ZINC MEDIA GR on December 6, 2024 and sell it today you would earn a total of  3.00  from holding ZINC MEDIA GR or generate 4.29% return on investment over 90 days.

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

ON SEMICONDUCTOR  vs.  ZINC MEDIA GR

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. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ZINC MEDIA GR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZINC MEDIA GR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZINC MEDIA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ON SEMICONDUCTOR and ZINC MEDIA

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

The idea behind ON SEMICONDUCTOR and ZINC MEDIA GR 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.