Correlation Between 10X Genomics and Talkspace

Can any of the company-specific risk be diversified away by investing in both 10X Genomics 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 10X Genomics and Talkspace into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Genomics and Talkspace, you can compare the effects of market volatilities on 10X Genomics 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 10X Genomics with a short position of Talkspace. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Genomics and Talkspace.

Diversification Opportunities for 10X Genomics and Talkspace

-0.88

Correlation Coefficient

10X Genomics  Talkspace

Pay attention - limited upside

The 3 months correlation between 10X and Talkspace is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding 10X Genomics and Talkspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talkspace and 10X Genomics 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 10X Genomics 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 10X Genomics i.e., 10X Genomics and Talkspace go up and down completely randomly.

Pair Corralation between 10X Genomics and Talkspace

Considering the 90-day investment horizon 10X Genomics is expected to under-perform the Talkspace. In addition to that, 10X Genomics is 1.03 times more volatile than Talkspace. It trades about -0.1 of its total potential returns per unit of risk. Talkspace is currently generating about 0.23 per unit of volatility. If you would invest  190.00  in Talkspace on September 2, 2024 and sell it today you would earn a total of  152.00  from holding Talkspace or generate 80.0% return on investment over 90 days.

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

10X Genomics  vs.  Talkspace

10X Genomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Genomics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 10X Genomics and Talkspace

The main advantage of trading using opposite 10X Genomics and Talkspace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Genomics 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 10X Genomics 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.