Correlation Between Talkspace and Advent Technologies

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

By analyzing existing cross correlation between Talkspace and Advent Technologies Holdings, you can compare the effects of market volatilities on Talkspace and Advent Technologies 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 Advent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talkspace and Advent Technologies.

Diversification Opportunities for Talkspace and Advent Technologies

0.44

Correlation Coefficient

Talkspace  Advent Technologies

Very weak diversification

The 3 months correlation between Talkspace and Advent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Talkspace and Advent Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Technologies 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 Advent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Technologies has no effect on the direction of Talkspace i.e., Talkspace and Advent Technologies go up and down completely randomly.

Pair Corralation between Talkspace and Advent Technologies

Assuming the 90 days horizon Talkspace is expected to generate 1.31 times more return on investment than Advent Technologies. However, Talkspace is 1.31 times more volatile than Advent Technologies Holdings. It trades about 0.16 of its potential returns per unit of risk. Advent Technologies Holdings is currently generating about 0.02 per unit of risk. If you would invest  5.98  in Talkspace on September 5, 2024 and sell it today you would earn a total of  7.63  from holding Talkspace or generate 127.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Talkspace  vs.  Advent Technologies Holdings

Talkspace

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Talkspace are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward-looking signals, Talkspace showed solid returns over the last few months and may actually be approaching a breakup point.

Advent Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Technologies Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Advent Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Talkspace and Advent Technologies

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

The idea behind Talkspace and Advent Technologies Holdings 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.