Correlation Between Aehr Test and Onto Innovation
Can any of the company-specific risk be diversified away by investing in both Aehr Test and Onto Innovation 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 Aehr Test and Onto Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aehr Test Systems and Onto Innovation, you can compare the effects of market volatilities on Aehr Test and Onto Innovation 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 Aehr Test with a short position of Onto Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Onto Innovation.
Diversification Opportunities for Aehr Test and Onto Innovation
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aehr and Onto is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Onto Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onto Innovation and Aehr Test 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 Aehr Test Systems are associated (or correlated) with Onto Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onto Innovation has no effect on the direction of Aehr Test i.e., Aehr Test and Onto Innovation go up and down completely randomly.
Pair Corralation between Aehr Test and Onto Innovation
Given the investment horizon of 90 days Aehr Test is expected to generate 401.3 times less return on investment than Onto Innovation. In addition to that, Aehr Test is 3.07 times more volatile than Onto Innovation. It trades about 0.0 of its total potential returns per unit of risk. Onto Innovation is currently generating about 0.51 per unit of volatility. If you would invest 16,750 in Onto Innovation on October 20, 2024 and sell it today you would earn a total of 4,909 from holding Onto Innovation or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Onto Innovation
Performance |
| Timeline |
| Aehr Test Systems |
| Onto Innovation |
Aehr Test and Onto Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Onto Innovation
The main advantage of trading using opposite Aehr Test and Onto Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test position performs unexpectedly, Onto Innovation 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 Onto Innovation will offset losses from the drop in Onto Innovation's long position.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Onto Innovation vs. Camtek | Onto Innovation vs. Amtech Systems | Onto Innovation vs. Veeco Instruments | Onto Innovation vs. Ichor Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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