Correlation Between Exela Technologies and SoundHound

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

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

Diversification Opportunities for Exela Technologies and SoundHound

0.0

Correlation Coefficient

Exela Technologies  SoundHound

Pay attention - limited upside

The 3 months correlation between Exela and SoundHound is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies and SoundHound AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoundHound AI and Exela Technologies 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 Exela Technologies are associated (or correlated) with SoundHound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoundHound AI has no effect on the direction of Exela Technologies i.e., Exela Technologies and SoundHound go up and down completely randomly.

Pair Corralation between Exela Technologies and SoundHound

If you would invest  895.00  in SoundHound AI on December 2, 2024 and sell it today you would earn a total of  187.00  from holding SoundHound AI or generate 20.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Exela Technologies  vs.  SoundHound AI

Exela Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Exela Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SoundHound AI

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SoundHound AI are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, SoundHound displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and SoundHound

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

The idea behind Exela Technologies and SoundHound AI 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.