Correlation Between SentinelOne and SoundHound

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

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

Diversification Opportunities for SentinelOne and SoundHound

0.2

Correlation Coefficient

SentinelOne  SoundHound

Modest diversification

The 3 months correlation between SentinelOne and SoundHound is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SentinelOne and SoundHound AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoundHound AI and SentinelOne 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 SentinelOne 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 SentinelOne i.e., SentinelOne and SoundHound go up and down completely randomly.

Pair Corralation between SentinelOne and SoundHound

Taking into account the 90-day investment horizon SentinelOne is expected to generate 8.56 times less return on investment than SoundHound. But when comparing it to its historical volatility, SentinelOne is 2.08 times less risky than SoundHound. It trades about 0.02 of its potential returns per unit of risk. SoundHound AI is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  915.00  in SoundHound AI on May 1, 2025 and sell it today you would earn a total of  154.00  from holding SoundHound AI or generate 16.83% return on investment over 90 days.

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

SentinelOne  vs.  SoundHound AI

SentinelOne

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SentinelOne are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SentinelOne is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private 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 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, SoundHound displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SentinelOne and SoundHound

The main advantage of trading using opposite SentinelOne and SoundHound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SentinelOne 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 SentinelOne 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.