Correlation Between CXApp and SoundHound
Can any of the company-specific risk be diversified away by investing in both CXApp and SoundHound 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 CXApp and SoundHound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CXApp Inc and SoundHound AI, you can compare the effects of market volatilities on CXApp and SoundHound 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 CXApp with a short position of SoundHound. Check out your portfolio center. Please also check ongoing floating volatility patterns of CXApp and SoundHound.
Diversification Opportunities for CXApp and SoundHound
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CXApp and SoundHound is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CXApp Inc and SoundHound AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoundHound AI and CXApp 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 CXApp Inc are associated (or correlated) with SoundHound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoundHound AI has no effect on the direction of CXApp i.e., CXApp and SoundHound go up and down completely randomly.
Pair Corralation between CXApp and SoundHound
Given the investment horizon of 90 days CXApp is expected to generate 4.46 times less return on investment than SoundHound. In addition to that, CXApp is 1.77 times more volatile than SoundHound AI. It trades about 0.01 of its total potential returns per unit of risk. SoundHound AI is currently generating about 0.08 per unit of volatility. If you would invest 239.00 in SoundHound AI on August 25, 2024 and sell it today you would earn a total of 586.00 from holding SoundHound AI or generate 245.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CXApp Inc vs. SoundHound AI
Performance |
| Timeline |
| CXApp Inc |
| SoundHound AI |
CXApp and SoundHound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CXApp and SoundHound
The main advantage of trading using opposite CXApp and SoundHound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CXApp position performs unexpectedly, SoundHound 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 SoundHound will offset losses from the drop in SoundHound's long position.The idea behind CXApp Inc and SoundHound AI 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.| SoundHound vs. Snowflake | SoundHound vs. Zoom Video Communications | SoundHound vs. Shopify | SoundHound vs. Workday |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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