Correlation Between Advanced Micro and Onto Innovation
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and Onto Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Onto Innovation, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Onto Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Onto Innovation.
Diversification Opportunities for Advanced Micro and Onto Innovation
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Advanced and Onto is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Onto Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onto Innovation and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and Onto Innovation go up and down completely randomly.
Pair Corralation between Advanced Micro and Onto Innovation
Considering the 90-day investment horizon Advanced Micro is expected to generate 1.22 times less return on investment than Onto Innovation. But when comparing it to its historical volatility, Advanced Micro Devices is 1.02 times less risky than Onto Innovation. It trades about 0.06 of its potential returns per unit of risk. Onto Innovation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,786 in Onto Innovation on September 13, 2024 and sell it today you would earn a total of 9,859 from holding Onto Innovation or generate 145.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Onto Innovation
Performance |
| Timeline |
| Advanced Micro Devices |
| Onto Innovation |
Advanced Micro and Onto Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Onto Innovation
The main advantage of trading using opposite Advanced Micro and Onto Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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