Correlation Between SoundHound and FlexiInternational

Can any of the company-specific risk be diversified away by investing in both SoundHound and FlexiInternational 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 FlexiInternational into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SoundHound AI and FlexiInternational Software, you can compare the effects of market volatilities on SoundHound and FlexiInternational 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 FlexiInternational. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoundHound and FlexiInternational.

Diversification Opportunities for SoundHound and FlexiInternational

-0.76

Correlation Coefficient

SoundHound  FlexiInternational

Pay attention - limited upside

The 3 months correlation between SoundHound and FlexiInternational is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and FlexiInternational Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexiInternational 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 FlexiInternational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexiInternational has no effect on the direction of SoundHound i.e., SoundHound and FlexiInternational go up and down completely randomly.

Pair Corralation between SoundHound and FlexiInternational

Given the investment horizon of 90 days SoundHound AI is expected to under-perform the FlexiInternational. In addition to that, SoundHound is 3.22 times more volatile than FlexiInternational Software. It trades about -0.11 of its total potential returns per unit of risk. FlexiInternational Software is currently generating about 0.29 per unit of volatility. If you would invest  48.00  in FlexiInternational Software on December 22, 2024 and sell it today you would earn a total of  9.00  from holding FlexiInternational Software or generate 18.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	40.0%
Values	Daily Returns

SoundHound AI  vs.  FlexiInternational Software

SoundHound AI

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoundHound AI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

FlexiInternational

Risk-Adjusted Performance

Solid

Over the last 90 days FlexiInternational Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly abnormal basic indicators, FlexiInternational demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SoundHound and FlexiInternational

The main advantage of trading using opposite SoundHound and FlexiInternational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoundHound position performs unexpectedly, FlexiInternational 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 FlexiInternational will offset losses from the drop in FlexiInternational's long position.

The idea behind SoundHound AI and FlexiInternational Software 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.