Correlation Between QualTek Services and Talkspace

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

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

Diversification Opportunities for QualTek Services and Talkspace

0.4

Correlation Coefficient

QualTek Services  Talkspace

Very weak diversification

The 3 months correlation between QualTek and Talkspace is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding QualTek Services and Talkspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talkspace and QualTek Services 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 QualTek Services 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 QualTek Services i.e., QualTek Services and Talkspace go up and down completely randomly.

Pair Corralation between QualTek Services and Talkspace

If you would invest  16.00  in Talkspace on October 20, 2024 and sell it today you would lose (2.00) from holding Talkspace or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

QualTek Services  vs.  Talkspace

QualTek Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QualTek Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, QualTek Services is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Talkspace

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Talkspace are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward-looking signals, Talkspace may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with QualTek Services and Talkspace

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

The idea behind QualTek Services and Talkspace 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.