Correlation Between Endava and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Endava 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 Endava and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endava and Teleperformance SE, you can compare the effects of market volatilities on Endava 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 Endava with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endava and Teleperformance.
Diversification Opportunities for Endava and Teleperformance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Endava and Teleperformance is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Endava and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Endava 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 Endava 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 Endava i.e., Endava and Teleperformance go up and down completely randomly.
Pair Corralation between Endava and Teleperformance
Given the investment horizon of 90 days Endava is expected to under-perform the Teleperformance. But the stock apears to be less risky and, when comparing its historical volatility, Endava is 1.07 times less risky than Teleperformance. The stock trades about -0.06 of its potential returns per unit of risk. The Teleperformance SE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 13,516 in Teleperformance SE on November 9, 2024 and sell it today you would lose (4,108) from holding Teleperformance SE or give up 30.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 65.17% |
| Values | Daily Returns |
Endava vs. Teleperformance SE
Performance |
| Timeline |
| Endava |
| Teleperformance SE |
Endava and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endava and Teleperformance
The main advantage of trading using opposite Endava and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endava 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 Endava and Teleperformance SE 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. Teleperformance PK | Teleperformance vs. SMC Corp | Teleperformance vs. Schindler Holding AG | Teleperformance vs. Straumann Holding AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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