Correlation Between FormFactor and Aon PLC
Can any of the company-specific risk be diversified away by investing in both FormFactor and Aon PLC 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 FormFactor and Aon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Aon PLC, you can compare the effects of market volatilities on FormFactor and Aon PLC 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 FormFactor with a short position of Aon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Aon PLC.
Diversification Opportunities for FormFactor and Aon PLC
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FormFactor and Aon is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Aon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aon PLC and FormFactor 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 FormFactor are associated (or correlated) with Aon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aon PLC has no effect on the direction of FormFactor i.e., FormFactor and Aon PLC go up and down completely randomly.
Pair Corralation between FormFactor and Aon PLC
Given the investment horizon of 90 days FormFactor is expected to generate 2.98 times more return on investment than Aon PLC. However, FormFactor is 2.98 times more volatile than Aon PLC. It trades about 0.08 of its potential returns per unit of risk. Aon PLC is currently generating about -0.01 per unit of risk. If you would invest 3,562 in FormFactor on July 20, 2025 and sell it today you would earn a total of 643.00 from holding FormFactor or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Aon PLC
Performance |
| Timeline |
| FormFactor |
| Aon PLC |
FormFactor and Aon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Aon PLC
The main advantage of trading using opposite FormFactor and Aon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor position performs unexpectedly, Aon PLC 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 Aon PLC will offset losses from the drop in Aon PLC's long position.| FormFactor vs. Silicon Motion Technology | FormFactor vs. Power Integrations | FormFactor vs. Navitas Semiconductor Corp | FormFactor vs. Ambarella |
| Aon PLC vs. Arthur J Gallagher | Aon PLC vs. Marsh McLennan Companies | Aon PLC vs. Mizuho Financial Group | Aon PLC vs. Bank of Nova |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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