Correlation Between SoundHound and JPMorgan Chase

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

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

Diversification Opportunities for SoundHound and JPMorgan Chase

-0.76

Correlation Coefficient

SoundHound  JPMorgan Chase

Pay attention - limited upside

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

Pair Corralation between SoundHound and JPMorgan Chase

Given the investment horizon of 90 days SoundHound AI is expected to under-perform the JPMorgan Chase. In addition to that, SoundHound is 25.57 times more volatile than JPMorgan Chase Co. It trades about -0.1 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.11 per unit of volatility. If you would invest  2,482  in JPMorgan Chase Co on December 24, 2024 and sell it today you would earn a total of  54.00  from holding JPMorgan Chase Co or generate 2.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SoundHound AI  vs.  JPMorgan Chase Co

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.

JPMorgan Chase

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SoundHound and JPMorgan Chase

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

The idea behind SoundHound AI and JPMorgan Chase Co 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.