Correlation Between SoundHound and Trust Stamp
Can any of the company-specific risk be diversified away by investing in both SoundHound and Trust Stamp 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 Trust Stamp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoundHound AI and Trust Stamp, you can compare the effects of market volatilities on SoundHound and Trust Stamp 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 Trust Stamp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoundHound and Trust Stamp.
Diversification Opportunities for SoundHound and Trust Stamp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SoundHound and Trust is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and Trust Stamp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Stamp 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 Trust Stamp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Stamp has no effect on the direction of SoundHound i.e., SoundHound and Trust Stamp go up and down completely randomly.
Pair Corralation between SoundHound and Trust Stamp
Given the investment horizon of 90 days SoundHound is expected to generate 1.68 times less return on investment than Trust Stamp. But when comparing it to its historical volatility, SoundHound AI is 2.49 times less risky than Trust Stamp. It trades about 0.19 of its potential returns per unit of risk. Trust Stamp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Trust Stamp on August 28, 2024 and sell it today you would earn a total of 15.00 from holding Trust Stamp or generate 68.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SoundHound AI vs. Trust Stamp
Performance |
| Timeline |
| SoundHound AI |
| Trust Stamp |
SoundHound and Trust Stamp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoundHound and Trust Stamp
The main advantage of trading using opposite SoundHound and Trust Stamp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoundHound position performs unexpectedly, Trust Stamp 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 Trust Stamp will offset losses from the drop in Trust Stamp's long position.| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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