DEFINITION of ‘Heatmap’
A visual representation of data using colours. A heatmap can be used with all sorts of data, from representing the number of foreclosures to the spreads of credit default swaps.
For example, a heatmap of foreclosures data could show parts of the U.S. experiencing high rates of foreclosure in a dark colour and states with low foreclosure rates in lighter colors. A colour-gradient legend typically accompanies a heatmap to specify the data.
BREAKING DOWN ‘Heatmap’
Heatmaps became especially popular during the recession that began in 2008. Many people used heatmaps to quickly see the foreclosure rates in various states and compared them to heatmaps from previous months.