Correlation Between Bureau Veritas and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and Teleperformance 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 Bureau Veritas and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bureau Veritas SA and Teleperformance PK, you can compare the effects of market volatilities on Bureau Veritas and Teleperformance 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 Bureau Veritas with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and Teleperformance.
Diversification Opportunities for Bureau Veritas and Teleperformance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bureau and Teleperformance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and Teleperformance PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance PK and Bureau Veritas 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 Bureau Veritas SA are associated (or correlated) with Teleperformance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleperformance PK has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and Teleperformance go up and down completely randomly.
Pair Corralation between Bureau Veritas and Teleperformance
Assuming the 90 days horizon Bureau Veritas SA is expected to generate 0.6 times more return on investment than Teleperformance. However, Bureau Veritas SA is 1.66 times less risky than Teleperformance. It trades about 0.22 of its potential returns per unit of risk. Teleperformance PK is currently generating about -0.37 per unit of risk. If you would invest 5,968 in Bureau Veritas SA on September 19, 2024 and sell it today you would earn a total of 284.00 from holding Bureau Veritas SA or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bureau Veritas SA vs. Teleperformance PK
Performance |
| Timeline |
| Bureau Veritas SA |
| Teleperformance PK |
Bureau Veritas and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and Teleperformance
The main advantage of trading using opposite Bureau Veritas and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, Teleperformance 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 Teleperformance will offset losses from the drop in Teleperformance's long position.The idea behind Bureau Veritas SA and Teleperformance PK 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.| Teleperformance vs. Dexterra Group | Teleperformance vs. Intertek Group Plc | Teleperformance vs. Wildpack Beverage | Teleperformance vs. DATA Communications Management |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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