Correlation Between Teleperformance and Lumibird
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Lumibird 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 Teleperformance and Lumibird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance SE and Lumibird SA, you can compare the effects of market volatilities on Teleperformance and Lumibird 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 Teleperformance with a short position of Lumibird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Lumibird.
Diversification Opportunities for Teleperformance and Lumibird
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teleperformance and Lumibird is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Lumibird SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumibird SA and Teleperformance 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 Teleperformance SE are associated (or correlated) with Lumibird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumibird SA has no effect on the direction of Teleperformance i.e., Teleperformance and Lumibird go up and down completely randomly.
Pair Corralation between Teleperformance and Lumibird
Assuming the 90 days trading horizon Teleperformance SE is expected to under-perform the Lumibird. But the stock apears to be less risky and, when comparing its historical volatility, Teleperformance SE is 4.03 times less risky than Lumibird. The stock trades about -0.37 of its potential returns per unit of risk. The Lumibird SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 710.00 in Lumibird SA on August 30, 2024 and sell it today you would earn a total of 224.00 from holding Lumibird SA or generate 31.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance SE vs. Lumibird SA
Performance |
| Timeline |
| Teleperformance SE |
| Lumibird SA |
Teleperformance and Lumibird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Lumibird
The main advantage of trading using opposite Teleperformance and Lumibird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Lumibird 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 Lumibird will offset losses from the drop in Lumibird's long position.| Teleperformance vs. Accor S A | Teleperformance vs. Publicis Groupe SA | Teleperformance vs. Legrand SA | Teleperformance vs. Pernod Ricard SA |
| Lumibird vs. Aubay Socit Anonyme | Lumibird vs. Infotel SA | Lumibird vs. IT Link | Lumibird vs. Manitou BF SA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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