Correlation Between NYSE Composite and Onto Innovation
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Onto Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Onto Innovation, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Onto Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Onto Innovation.
Diversification Opportunities for NYSE Composite and Onto Innovation
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Onto is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Onto Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onto Innovation and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Onto Innovation go up and down completely randomly.
Pair Corralation between NYSE Composite and Onto Innovation
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.7 times less return on investment than Onto Innovation. But when comparing it to its historical volatility, NYSE Composite is 4.29 times less risky than Onto Innovation. It trades about 0.08 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 8,257 in Onto Innovation on August 27, 2024 and sell it today you would earn a total of 8,372 from holding Onto Innovation or generate 101.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Onto Innovation
Performance |
| Timeline |
NYSE Composite and Onto Innovation Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Onto Innovation
Pair trading matchups for Onto Innovation
Pair Trading with NYSE Composite and Onto Innovation
The main advantage of trading using opposite NYSE Composite and Onto Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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