Correlation Between NCino and Bigcommerce Holdings

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

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

Diversification Opportunities for NCino and Bigcommerce Holdings

0.44

Correlation Coefficient

NCino  Bigcommerce Holdings

Very weak diversification

The 3 months correlation between NCino and Bigcommerce is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding nCino Inc and Bigcommerce Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bigcommerce Holdings 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 Bigcommerce Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bigcommerce Holdings has no effect on the direction of NCino i.e., NCino and Bigcommerce Holdings go up and down completely randomly.

Pair Corralation between NCino and Bigcommerce Holdings

Given the investment horizon of 90 days NCino is expected to generate 2.91 times less return on investment than Bigcommerce Holdings. But when comparing it to its historical volatility, nCino Inc is 1.83 times less risky than Bigcommerce Holdings. It trades about 0.28 of its potential returns per unit of risk. Bigcommerce Holdings is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  524.00  in Bigcommerce Holdings on September 1, 2024 and sell it today you would earn a total of  213.00  from holding Bigcommerce Holdings or generate 40.65% return on investment over 90 days.

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

nCino Inc  vs.  Bigcommerce Holdings

nCino Inc

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in nCino Inc are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, NCino displayed solid returns over the last few months and may actually be approaching a breakup point.

Bigcommerce Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bigcommerce Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Bigcommerce Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NCino and Bigcommerce Holdings

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

The idea behind nCino Inc and Bigcommerce Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.