I have two raw sound streams that I need to add together. For the purposes of this question, we can assume they are the same bitrate and bit depth (say 16 bit sample, 44.1k
"Quieter by half" isn't quite correct. Because of the ear's logarithmic response, dividing the samples in half will make it 6-db quieter - certainly noticeable, but not disastrous.
You might want to compromise by multiplying by 0.75. That will make it 3-db quieter, but will lessen the chance of overflow and also lessen the distortion when it does happen.