Correlation Between SoundHound and Exela Technologies
Can any of the company-specific risk be diversified away by investing in both SoundHound and Exela Technologies 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 Exela Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoundHound AI and Exela Technologies, you can compare the effects of market volatilities on SoundHound and Exela Technologies 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 Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoundHound and Exela Technologies.
Diversification Opportunities for SoundHound and Exela Technologies
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SoundHound and Exela is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and Exela Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of SoundHound i.e., SoundHound and Exela Technologies go up and down completely randomly.
Pair Corralation between SoundHound and Exela Technologies
Given the investment horizon of 90 days SoundHound AI is expected to generate 1.22 times more return on investment than Exela Technologies. However, SoundHound is 1.22 times more volatile than Exela Technologies. It trades about 0.11 of its potential returns per unit of risk. Exela Technologies is currently generating about -0.11 per unit of risk. If you would invest 493.00 in SoundHound AI on September 2, 2024 and sell it today you would earn a total of 438.00 from holding SoundHound AI or generate 88.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
SoundHound AI vs. Exela Technologies
Performance |
| Timeline |
| SoundHound AI |
| Exela Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SoundHound and Exela Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SoundHound and Exela Technologies
The main advantage of trading using opposite SoundHound and Exela Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoundHound position performs unexpectedly, Exela Technologies 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 Exela Technologies will offset losses from the drop in Exela Technologies' long position.| SoundHound vs. Snowflake | SoundHound vs. Zoom Video Communications | SoundHound vs. Shopify | SoundHound vs. Workday |
| Exela Technologies vs. HeartCore Enterprises | Exela Technologies vs. Infobird Co | Exela Technologies vs. Quhuo | Exela Technologies vs. CXApp Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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