Correlation Between ON Semiconductor and Onto Innovation
Can any of the company-specific risk be diversified away by investing in both ON Semiconductor 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 ON Semiconductor and Onto Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON Semiconductor and Onto Innovation, you can compare the effects of market volatilities on ON Semiconductor 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 ON Semiconductor with a short position of Onto Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON Semiconductor and Onto Innovation.
Diversification Opportunities for ON Semiconductor and Onto Innovation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ON Semiconductor and Onto is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and Onto Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onto Innovation and ON Semiconductor 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 ON Semiconductor 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 ON Semiconductor i.e., ON Semiconductor and Onto Innovation go up and down completely randomly.
Pair Corralation between ON Semiconductor and Onto Innovation
Allowing for the 90-day total investment horizon ON Semiconductor is expected to generate 1.13 times less return on investment than Onto Innovation. But when comparing it to its historical volatility, ON Semiconductor is 1.07 times less risky than Onto Innovation. It trades about 0.07 of its potential returns per unit of risk. Onto Innovation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,530 in Onto Innovation on October 6, 2025 and sell it today you would earn a total of 2,057 from holding Onto Innovation or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ON Semiconductor vs. Onto Innovation
Performance |
| Timeline |
| ON Semiconductor |
| Onto Innovation |
ON Semiconductor and Onto Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON Semiconductor and Onto Innovation
The main advantage of trading using opposite ON Semiconductor and Onto Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON Semiconductor 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.| ON Semiconductor vs. STMicroelectronics NV ADR | ON Semiconductor vs. United Microelectronics | ON Semiconductor vs. Globalfoundries | ON Semiconductor vs. Tyler Technologies |
| Onto Innovation vs. Universal Display | Onto Innovation vs. Cirrus Logic | Onto Innovation vs. Camtek | Onto Innovation vs. Semtech |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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