Correlation Between Talkspace and Take Two

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

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

Diversification Opportunities for Talkspace and Take Two

-0.2

Correlation Coefficient

Talkspace  Take Two

Good diversification

The 3 months correlation between Talkspace and Take is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Talkspace and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Talkspace i.e., Talkspace and Take Two go up and down completely randomly.

Pair Corralation between Talkspace and Take Two

Assuming the 90 days horizon Talkspace is expected to generate 14.01 times more return on investment than Take Two. However, Talkspace is 14.01 times more volatile than Take Two Interactive Software. It trades about 0.3 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.04 per unit of risk. If you would invest  4.75  in Talkspace on July 14, 2024 and sell it today you would earn a total of  6.25  from holding Talkspace or generate 131.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

Talkspace  vs.  Take Two Interactive Software

Talkspace

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Talkspace are ranked lower than 9 (%) 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.

Take Two Interactive

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Take Two is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Talkspace and Take Two

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

The idea behind Talkspace and Take Two Interactive Software 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.