Correlation Between Didi Global and NCino
Can any of the company-specific risk be diversified away by investing in both Didi Global and NCino 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 Didi Global and NCino into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Didi Global ADR and nCino Inc, you can compare the effects of market volatilities on Didi Global and NCino 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 Didi Global with a short position of NCino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Didi Global and NCino.
Diversification Opportunities for Didi Global and NCino
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Didi and NCino is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Didi Global ADR and nCino Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nCino Inc and Didi Global 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 Didi Global ADR are associated (or correlated) with NCino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nCino Inc has no effect on the direction of Didi Global i.e., Didi Global and NCino go up and down completely randomly.
Pair Corralation between Didi Global and NCino
Assuming the 90 days horizon Didi Global ADR is expected to generate 2.34 times more return on investment than NCino. However, Didi Global is 2.34 times more volatile than nCino Inc. It trades about 0.15 of its potential returns per unit of risk. nCino Inc is currently generating about 0.05 per unit of risk. If you would invest 299.00 in Didi Global ADR on August 24, 2024 and sell it today you would earn a total of 136.00 from holding Didi Global ADR or generate 45.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 9.27% |
| Values | Daily Returns |
Didi Global ADR vs. nCino Inc
Performance |
| Timeline |
| Didi Global ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| nCino Inc |
Didi Global and NCino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Didi Global and NCino
The main advantage of trading using opposite Didi Global and NCino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Didi Global position performs unexpectedly, NCino 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 NCino will offset losses from the drop in NCino's long position.| Didi Global vs. LYFT Inc | Didi Global vs. Unity Software | Didi Global vs. Uber Technologies | Didi Global vs. Digital Turbine |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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