Correlation Between Teleperformance and Mercialys
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Mercialys 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 Mercialys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance SE and Mercialys SA, you can compare the effects of market volatilities on Teleperformance and Mercialys 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 Mercialys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Mercialys.
Diversification Opportunities for Teleperformance and Mercialys
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teleperformance and Mercialys is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Mercialys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercialys 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 Mercialys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercialys SA has no effect on the direction of Teleperformance i.e., Teleperformance and Mercialys go up and down completely randomly.
Pair Corralation between Teleperformance and Mercialys
Assuming the 90 days trading horizon Teleperformance SE is expected to under-perform the Mercialys. In addition to that, Teleperformance is 2.34 times more volatile than Mercialys SA. It trades about -0.04 of its total potential returns per unit of risk. Mercialys SA is currently generating about 0.04 per unit of volatility. If you would invest 959.00 in Mercialys SA on November 5, 2024 and sell it today you would earn a total of 98.00 from holding Mercialys SA or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance SE vs. Mercialys SA
Performance |
| Timeline |
| Teleperformance SE |
| Mercialys SA |
Teleperformance and Mercialys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Mercialys
The main advantage of trading using opposite Teleperformance and Mercialys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Mercialys 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 Mercialys will offset losses from the drop in Mercialys' long position.| Teleperformance vs. Worldline SA | Teleperformance vs. Eurofins Scientific SE | Teleperformance vs. Sartorius Stedim Biotech | Teleperformance vs. Dassault Systemes SE |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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