Correlation Between SoundHound and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both SoundHound and Carbios SAS 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 SoundHound and Carbios SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoundHound AI and Carbios SAS, you can compare the effects of market volatilities on SoundHound and Carbios SAS 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 SoundHound with a short position of Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoundHound and Carbios SAS.
Diversification Opportunities for SoundHound and Carbios SAS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SoundHound and Carbios is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS and SoundHound 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 SoundHound AI are associated (or correlated) with Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of SoundHound i.e., SoundHound and Carbios SAS go up and down completely randomly.
Pair Corralation between SoundHound and Carbios SAS
Given the investment horizon of 90 days SoundHound AI is expected to generate 1.45 times more return on investment than Carbios SAS. However, SoundHound is 1.45 times more volatile than Carbios SAS. It trades about 0.47 of its potential returns per unit of risk. Carbios SAS is currently generating about 0.1 per unit of risk. If you would invest 663.00 in SoundHound AI on September 15, 2024 and sell it today you would earn a total of 1,028 from holding SoundHound AI or generate 155.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoundHound AI vs. Carbios SAS
Performance |
| Timeline |
| SoundHound AI |
| Carbios SAS |
SoundHound and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoundHound and Carbios SAS
The main advantage of trading using opposite SoundHound and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoundHound position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| SoundHound vs. Snowflake | SoundHound vs. Zoom Video Communications | SoundHound vs. Shopify | SoundHound vs. Workday |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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