Correlation Between SoundHound and Matterport

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

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

Diversification Opportunities for SoundHound and Matterport

-0.75

Correlation Coefficient

SoundHound  Matterport

Pay attention - limited upside

The 3 months correlation between SoundHound and Matterport is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and Matterport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matterport 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 Matterport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matterport has no effect on the direction of SoundHound i.e., SoundHound and Matterport go up and down completely randomly.

Pair Corralation between SoundHound and Matterport

Given the investment horizon of 90 days SoundHound AI is expected to under-perform the Matterport. In addition to that, SoundHound is 6.72 times more volatile than Matterport. It trades about -0.11 of its total potential returns per unit of risk. Matterport is currently generating about 0.24 per unit of volatility. If you would invest  473.00  in Matterport on December 22, 2024 and sell it today you would earn a total of  65.00  from holding Matterport or generate 13.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.67%
Values	Daily Returns

SoundHound AI  vs.  Matterport

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.

Matterport

Risk-Adjusted Performance

Solid

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

Pair Trading with SoundHound and Matterport

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

The idea behind SoundHound AI and Matterport 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.