Correlation Between NCino and SAP SE
Can any of the company-specific risk be diversified away by investing in both NCino and SAP SE 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 NCino and SAP SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nCino Inc and SAP SE, you can compare the effects of market volatilities on NCino and SAP SE 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 NCino with a short position of SAP SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCino and SAP SE.
Diversification Opportunities for NCino and SAP SE
Poor diversification
The 3 months correlation between NCino and SAP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding nCino Inc and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and NCino 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 nCino Inc are associated (or correlated) with SAP SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of NCino i.e., NCino and SAP SE go up and down completely randomly.
Pair Corralation between NCino and SAP SE
Given the investment horizon of 90 days NCino is expected to generate 2.59 times less return on investment than SAP SE. In addition to that, NCino is 1.44 times more volatile than SAP SE. It trades about 0.03 of its total potential returns per unit of risk. SAP SE is currently generating about 0.11 per unit of volatility. If you would invest 13,271 in SAP SE on September 13, 2024 and sell it today you would earn a total of 11,539 from holding SAP SE or generate 86.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.15% |
| Values | Daily Returns |
nCino Inc vs. SAP SE
Performance |
| Timeline |
| nCino Inc |
| SAP SE |
NCino and SAP SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCino and SAP SE
The main advantage of trading using opposite NCino and SAP SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCino position performs unexpectedly, SAP SE 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 SAP SE will offset losses from the drop in SAP SE's long position.| NCino vs. Clearwater Analytics Holdings | NCino vs. Meridianlink | NCino vs. Bigcommerce Holdings | NCino vs. ZoomInfo Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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