Correlation Between Onto Innovation and InTest
Can any of the company-specific risk be diversified away by investing in both Onto Innovation and InTest 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 Onto Innovation and InTest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onto Innovation and inTest, you can compare the effects of market volatilities on Onto Innovation and InTest 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 Onto Innovation with a short position of InTest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onto Innovation and InTest.
Diversification Opportunities for Onto Innovation and InTest
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Onto and InTest is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Onto Innovation and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest and Onto Innovation 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 Onto Innovation are associated (or correlated) with InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of Onto Innovation i.e., Onto Innovation and InTest go up and down completely randomly.
Pair Corralation between Onto Innovation and InTest
Given the investment horizon of 90 days Onto Innovation is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, Onto Innovation is 1.05 times less risky than InTest. The stock trades about -0.25 of its potential returns per unit of risk. The inTest is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 738.00 in inTest on August 28, 2024 and sell it today you would earn a total of 39.00 from holding inTest or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onto Innovation vs. inTest
Performance |
| Timeline |
| Onto Innovation |
| inTest |
Onto Innovation and InTest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onto Innovation and InTest
The main advantage of trading using opposite Onto Innovation and InTest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onto Innovation position performs unexpectedly, InTest 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 InTest will offset losses from the drop in InTest's long position.| Onto Innovation vs. Camtek | Onto Innovation vs. Amtech Systems | Onto Innovation vs. Veeco Instruments | Onto Innovation vs. Ichor Holdings |
| InTest vs. Axcelis Technologies | InTest vs. Lam Research Corp | InTest vs. Photronics | InTest vs. indie Semiconductor |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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