Correlation Between NCino and Alkami Technology

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

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

Diversification Opportunities for NCino and Alkami Technology

0.93

Correlation Coefficient

NCino  Alkami Technology

Almost no diversification

The 3 months correlation between NCino and Alkami is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding nCino Inc and Alkami Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkami Technology 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 Alkami Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkami Technology has no effect on the direction of NCino i.e., NCino and Alkami Technology go up and down completely randomly.

Pair Corralation between NCino and Alkami Technology

Given the investment horizon of 90 days NCino is expected to generate 1.46 times less return on investment than Alkami Technology. But when comparing it to its historical volatility, nCino Inc is 1.01 times less risky than Alkami Technology. It trades about 0.07 of its potential returns per unit of risk. Alkami Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,270  in Alkami Technology on September 4, 2024 and sell it today you would earn a total of  1,572  from holding Alkami Technology or generate 69.25% return on investment over 90 days.

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

nCino Inc  vs.  Alkami Technology

nCino Inc

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in nCino Inc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, NCino displayed solid returns over the last few months and may actually be approaching a breakup point.

Alkami Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkami Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Alkami Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NCino and Alkami Technology

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

The idea behind nCino Inc and Alkami Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.