Correlation Between InMode and SoundHound
Can any of the company-specific risk be diversified away by investing in both InMode 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 InMode and SoundHound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InMode and SoundHound AI, you can compare the effects of market volatilities on InMode 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 InMode with a short position of SoundHound. Check out your portfolio center. Please also check ongoing floating volatility patterns of InMode and SoundHound.
Diversification Opportunities for InMode and SoundHound
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InMode and SoundHound is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding InMode and SoundHound AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoundHound AI and InMode 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 InMode 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 InMode i.e., InMode and SoundHound go up and down completely randomly.
Pair Corralation between InMode and SoundHound
Given the investment horizon of 90 days InMode is expected to under-perform the SoundHound. But the stock apears to be less risky and, when comparing its historical volatility, InMode is 4.18 times less risky than SoundHound. The stock trades about -0.05 of its potential returns per unit of risk. The SoundHound AI is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 756.00 in SoundHound AI on September 13, 2024 and sell it today you would earn a total of 611.00 from holding SoundHound AI or generate 80.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
InMode vs. SoundHound AI
Performance |
| Timeline |
| InMode |
| SoundHound AI |
InMode and SoundHound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InMode and SoundHound
The main advantage of trading using opposite InMode and SoundHound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InMode 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.| InMode vs. TransMedics Group | InMode vs. Inspire Medical Systems | InMode vs. Inari Medical | InMode vs. Insulet |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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