Correlation Between Visa and Talkspace
Can any of the company-specific risk be diversified away by investing in both Visa and Talkspace 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 Visa and Talkspace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Talkspace, you can compare the effects of market volatilities on Visa and Talkspace 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 Visa with a short position of Talkspace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Talkspace.
Diversification Opportunities for Visa and Talkspace
Poor diversification
The 3 months correlation between Visa and Talkspace is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Talkspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talkspace and Visa 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 Visa Class A are associated (or correlated) with Talkspace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talkspace has no effect on the direction of Visa i.e., Visa and Talkspace go up and down completely randomly.
Pair Corralation between Visa and Talkspace
Taking into account the 90-day investment horizon Visa is expected to generate 3.68 times less return on investment than Talkspace. But when comparing it to its historical volatility, Visa Class A is 3.87 times less risky than Talkspace. It trades about 0.1 of its potential returns per unit of risk. Talkspace is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Talkspace on August 31, 2024 and sell it today you would earn a total of 229.00 from holding Talkspace or generate 202.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Talkspace
Performance |
| Timeline |
| Visa Class A |
| Talkspace |
Visa and Talkspace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Talkspace
The main advantage of trading using opposite Visa and Talkspace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Talkspace 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 Talkspace will offset losses from the drop in Talkspace's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Talkspace vs. Taboola | Talkspace vs. Payoneer Global | Talkspace vs. Katapult Holdings | Talkspace vs. ATI Physical Therapy |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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