Correlation Between Teleperformance and Rexel SA
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Rexel SA 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 Rexel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance SE and Rexel SA, you can compare the effects of market volatilities on Teleperformance and Rexel SA 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 Rexel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Rexel SA.
Diversification Opportunities for Teleperformance and Rexel SA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teleperformance and Rexel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Rexel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexel 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 Rexel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexel SA has no effect on the direction of Teleperformance i.e., Teleperformance and Rexel SA go up and down completely randomly.
Pair Corralation between Teleperformance and Rexel SA
Assuming the 90 days trading horizon Teleperformance SE is expected to generate 0.97 times more return on investment than Rexel SA. However, Teleperformance SE is 1.04 times less risky than Rexel SA. It trades about 0.29 of its potential returns per unit of risk. Rexel SA is currently generating about 0.19 per unit of risk. If you would invest 8,030 in Teleperformance SE on October 24, 2024 and sell it today you would earn a total of 718.00 from holding Teleperformance SE or generate 8.94% 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. Rexel SA
Performance |
| Timeline |
| Teleperformance SE |
| Rexel SA |
Teleperformance and Rexel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Rexel SA
The main advantage of trading using opposite Teleperformance and Rexel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Rexel SA 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 Rexel SA will offset losses from the drop in Rexel SA's 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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