Correlation Between Global Payments and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Global Payments 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 Global Payments and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Payments and Teleperformance SE, you can compare the effects of market volatilities on Global Payments 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 Global Payments with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and Teleperformance.
Diversification Opportunities for Global Payments and Teleperformance
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Teleperformance is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Global Payments 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 Global Payments 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 Global Payments i.e., Global Payments and Teleperformance go up and down completely randomly.
Pair Corralation between Global Payments and Teleperformance
Considering the 90-day investment horizon Global Payments is expected to generate 0.78 times more return on investment than Teleperformance. However, Global Payments is 1.29 times less risky than Teleperformance. It trades about 0.06 of its potential returns per unit of risk. Teleperformance SE is currently generating about -0.05 per unit of risk. If you would invest 10,910 in Global Payments on September 12, 2024 and sell it today you would earn a total of 666.00 from holding Global Payments or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Payments vs. Teleperformance SE
Performance |
| Timeline |
| Global Payments |
| Teleperformance SE |
Global Payments and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Payments and Teleperformance
The main advantage of trading using opposite Global Payments and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Payments 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.| Global Payments vs. Copart Inc | Global Payments vs. ABM Industries Incorporated | Global Payments vs. Thomson Reuters Corp | Global Payments vs. Aramark Holdings |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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