Correlation Between NCino and Fair Isaac

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

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

Diversification Opportunities for NCino and Fair Isaac

0.89

Correlation Coefficient

NCino  Fair Isaac

Very poor diversification

The 3 months correlation between NCino and Fair is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding nCino Inc and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of NCino i.e., NCino and Fair Isaac go up and down completely randomly.

Pair Corralation between NCino and Fair Isaac

Given the investment horizon of 90 days NCino is expected to generate 1.01 times less return on investment than Fair Isaac. In addition to that, NCino is 1.11 times more volatile than Fair Isaac. It trades about 0.3 of its total potential returns per unit of risk. Fair Isaac is currently generating about 0.33 per unit of volatility. If you would invest  168,841  in Fair Isaac on September 2, 2024 and sell it today you would earn a total of  68,662  from holding Fair Isaac or generate 40.67% return on investment over 90 days.

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

nCino Inc  vs.  Fair Isaac

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.

Fair Isaac

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Fair Isaac displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NCino and Fair Isaac

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

The idea behind nCino Inc and Fair Isaac 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.