Correlation Between NCino and MondayCom

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

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

Diversification Opportunities for NCino and MondayCom

0.22

Correlation Coefficient

NCino  MondayCom

Modest diversification

The 3 months correlation between NCino and MondayCom is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding nCino Inc and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom 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 MondayCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MondayCom has no effect on the direction of NCino i.e., NCino and MondayCom go up and down completely randomly.

Pair Corralation between NCino and MondayCom

Given the investment horizon of 90 days nCino Inc is expected to under-perform the MondayCom. But the stock apears to be less risky and, when comparing its historical volatility, nCino Inc is 2.16 times less risky than MondayCom. The stock trades about -0.22 of its potential returns per unit of risk. The MondayCom is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  28,536  in MondayCom on November 29, 2024 and sell it today you would earn a total of  2,068  from holding MondayCom or generate 7.25% return on investment over 90 days.

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

nCino Inc  vs.  MondayCom

nCino Inc

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

MondayCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, MondayCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NCino and MondayCom

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

The idea behind nCino Inc and MondayCom 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.