Correlation Between SoundHound and Nogin

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

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

Diversification Opportunities for SoundHound and Nogin

-0.49

Correlation Coefficient

SoundHound  Nogin

Very good diversification

The 3 months correlation between SoundHound and Nogin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SoundHound AI and Nogin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nogin Inc 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 Nogin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nogin Inc has no effect on the direction of SoundHound i.e., SoundHound and Nogin go up and down completely randomly.

Pair Corralation between SoundHound and Nogin

If you would invest  194.00  in SoundHound AI on September 4, 2024 and sell it today you would earn a total of  166.00  from holding SoundHound AI or generate 85.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

SoundHound AI  vs.  Nogin Inc

SoundHound AI

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SoundHound AI are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SoundHound showed solid returns over the last few months and may actually be approaching a breakup point.

Nogin Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nogin Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nogin is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SoundHound and Nogin

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

The idea behind SoundHound AI and Nogin Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.