Correlation Between Pernod Ricard and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard 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 Pernod Ricard and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pernod Ricard SA and Teleperformance SE, you can compare the effects of market volatilities on Pernod Ricard 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 Pernod Ricard with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Teleperformance.
Diversification Opportunities for Pernod Ricard and Teleperformance
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pernod and Teleperformance is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Pernod Ricard 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 Pernod Ricard 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 SE has no effect on the direction of Pernod Ricard i.e., Pernod Ricard and Teleperformance go up and down completely randomly.
Pair Corralation between Pernod Ricard and Teleperformance
Assuming the 90 days horizon Pernod Ricard SA is expected to generate 1.94 times more return on investment than Teleperformance. However, Pernod Ricard is 1.94 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 11,293 in Pernod Ricard SA on September 13, 2024 and sell it today you would earn a total of 147.00 from holding Pernod Ricard SA or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pernod Ricard SA vs. Teleperformance SE
Performance |
| Timeline |
| Pernod Ricard SA |
| Teleperformance SE |
Pernod Ricard and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Teleperformance
The main advantage of trading using opposite Pernod Ricard and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard 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.| Pernod Ricard vs. Remy Cointreau SA | Pernod Ricard vs. Treasury Wine Estates | Pernod Ricard vs. MGP Ingredients | Pernod Ricard vs. Naked Wines plc |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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