Correlation Between Talkspace and Teladoc

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

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

Diversification Opportunities for Talkspace and Teladoc

0.83

Correlation Coefficient

Talkspace  Teladoc

Very poor diversification

The 3 months correlation between Talkspace and Teladoc is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Talkspace and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and Talkspace 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 Talkspace are associated (or correlated) with Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Talkspace i.e., Talkspace and Teladoc go up and down completely randomly.

Pair Corralation between Talkspace and Teladoc

Given the investment horizon of 90 days Talkspace is expected to generate 1.05 times more return on investment than Teladoc. However, Talkspace is 1.05 times more volatile than Teladoc. It trades about 0.09 of its potential returns per unit of risk. Teladoc is currently generating about -0.03 per unit of risk. If you would invest  75.00  in Talkspace on December 1, 2024 and sell it today you would earn a total of  211.00  from holding Talkspace or generate 281.33% return on investment over 90 days.

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

Talkspace  vs.  Teladoc

Talkspace

Risk-Adjusted Performance

Very Weak

Over the last 90 days Talkspace has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Teladoc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teladoc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Talkspace and Teladoc

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

The idea behind Talkspace and Teladoc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.