Correlation Between ON Semiconductor and Daktronics

Can any of the company-specific risk be diversified away by investing in both ON Semiconductor and Daktronics 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 Daktronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ON Semiconductor and Daktronics, you can compare the effects of market volatilities on ON Semiconductor and Daktronics 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 Daktronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON Semiconductor and Daktronics.

Diversification Opportunities for ON Semiconductor and Daktronics

0.68

Correlation Coefficient

ON Semiconductor  Daktronics

Poor diversification

The 3 months correlation between ON Semiconductor and Daktronics is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and Daktronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daktronics 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 Daktronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daktronics has no effect on the direction of ON Semiconductor i.e., ON Semiconductor and Daktronics go up and down completely randomly.

Pair Corralation between ON Semiconductor and Daktronics

Allowing for the 90-day total investment horizon ON Semiconductor is expected to generate 1.26 times more return on investment than Daktronics. However, ON Semiconductor is 1.26 times more volatile than Daktronics. It trades about 0.11 of its potential returns per unit of risk. Daktronics is currently generating about 0.13 per unit of risk. If you would invest  3,880  in ON Semiconductor on May 7, 2025 and sell it today you would earn a total of  917.00  from holding ON Semiconductor or generate 23.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ON Semiconductor  vs.  Daktronics

ON Semiconductor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ON Semiconductor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ON Semiconductor displayed solid returns over the last few months and may actually be approaching a breakup point.

Daktronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daktronics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Daktronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ON Semiconductor and Daktronics

The main advantage of trading using opposite ON Semiconductor and Daktronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON Semiconductor position performs unexpectedly, Daktronics 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 Daktronics will offset losses from the drop in Daktronics' long position.

The idea behind ON Semiconductor and Daktronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.