Correlation Between Carlsberg and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Carlsberg 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 Carlsberg and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Teleperformance SE, you can compare the effects of market volatilities on Carlsberg 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 Carlsberg with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Teleperformance.
Diversification Opportunities for Carlsberg and Teleperformance
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and Teleperformance is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Carlsberg 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 Carlsberg AS 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 SE has no effect on the direction of Carlsberg i.e., Carlsberg and Teleperformance go up and down completely randomly.
Pair Corralation between Carlsberg and Teleperformance
Assuming the 90 days horizon Carlsberg AS is expected to generate 2.48 times more return on investment than Teleperformance. However, Carlsberg is 2.48 times more volatile than Teleperformance SE. It trades about 0.03 of its potential returns per unit of risk. Teleperformance SE is currently generating about -0.05 per unit of risk. If you would invest 10,085 in Carlsberg AS on September 13, 2024 and sell it today you would earn a total of 125.00 from holding Carlsberg AS or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Teleperformance SE
Performance |
| Timeline |
| Carlsberg AS |
| Teleperformance SE |
Carlsberg and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Teleperformance
The main advantage of trading using opposite Carlsberg and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg 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.| Carlsberg vs. Heineken NV | Carlsberg vs. Anheuser Busch Inbev | Carlsberg vs. Compania Cervecerias Unidas | Carlsberg vs. Boston Beer |
| Teleperformance vs. Cintas | Teleperformance vs. Thomson Reuters Corp | Teleperformance vs. Global Payments | Teleperformance vs. RB Global |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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