Correlation Between BASE and NCino

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

By analyzing existing cross correlation between BASE Inc and nCino Inc, you can compare the effects of market volatilities on BASE 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 BASE with a short position of NCino. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASE and NCino.

Diversification Opportunities for BASE and NCino

-0.48

Correlation Coefficient

BASE  NCino

Very good diversification

The 3 months correlation between BASE and NCino is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BASE Inc and nCino Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nCino Inc and BASE 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 BASE Inc 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 BASE i.e., BASE and NCino go up and down completely randomly.

Pair Corralation between BASE and NCino

Assuming the 90 days horizon BASE is expected to generate 1.65 times less return on investment than NCino. In addition to that, BASE is 1.15 times more volatile than nCino Inc. It trades about 0.02 of its total potential returns per unit of risk. nCino Inc is currently generating about 0.03 per unit of volatility. If you would invest  2,521  in nCino Inc on October 15, 2024 and sell it today you would earn a total of  733.00  from holding nCino Inc or generate 29.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

BASE Inc  vs.  nCino Inc

BASE Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BASE Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, BASE reported solid returns over the last few months and may actually be approaching a breakup point.

nCino Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days nCino Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NCino is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BASE and NCino

The main advantage of trading using opposite BASE and NCino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASE 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.

The idea behind BASE Inc and nCino Inc 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .