Correlation Between Globus Medical, and ON Semiconductor

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

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

Diversification Opportunities for Globus Medical, and ON Semiconductor

-0.76

Correlation Coefficient

Globus Medical,  ON Semiconductor

Pay attention - limited upside

The 3 months correlation between Globus and O2NS34 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical, and ON Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON Semiconductor and Globus Medical, 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 Globus Medical, 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 Globus Medical, i.e., Globus Medical, and ON Semiconductor go up and down completely randomly.

Pair Corralation between Globus Medical, and ON Semiconductor

Assuming the 90 days trading horizon Globus Medical, is expected to under-perform the ON Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Globus Medical, is 1.19 times less risky than ON Semiconductor. The stock trades about -0.13 of its potential returns per unit of risk. The ON Semiconductor is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,644  in ON Semiconductor on April 25, 2025 and sell it today you would earn a total of  1,490  from holding ON Semiconductor or generate 56.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Globus Medical,  vs.  ON Semiconductor

Globus Medical,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globus Medical, 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 August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ON Semiconductor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ON Semiconductor are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ON Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Medical, and ON Semiconductor

The main advantage of trading using opposite Globus Medical, and ON Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical, 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 Globus Medical, 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.