Correlation Between CareCloud and Talkspace

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

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

Diversification Opportunities for CareCloud and Talkspace

0.6

Correlation Coefficient

CareCloud  Talkspace

Poor diversification

The 3 months correlation between CareCloud and Talkspace is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CareCloud and Talkspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talkspace and CareCloud 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 CareCloud 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 CareCloud i.e., CareCloud and Talkspace go up and down completely randomly.

Pair Corralation between CareCloud and Talkspace

Assuming the 90 days horizon CareCloud is expected to generate 2.4 times more return on investment than Talkspace. However, CareCloud is 2.4 times more volatile than Talkspace. It trades about 0.22 of its potential returns per unit of risk. Talkspace is currently generating about 0.15 per unit of risk. If you would invest  1,220  in CareCloud on August 31, 2024 and sell it today you would earn a total of  414.00  from holding CareCloud or generate 33.93% return on investment over 90 days.

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

CareCloud  vs.  Talkspace

CareCloud

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CareCloud are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, CareCloud reported solid returns over the last few months and may actually be approaching a breakup point.

Talkspace

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Talkspace are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Talkspace disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CareCloud and Talkspace

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

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.