Correlation Between Teleperformance and Sodexo SA
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Sodexo 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 Sodexo 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 Sodexo SA, you can compare the effects of market volatilities on Teleperformance and Sodexo 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 Sodexo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Sodexo SA.
Diversification Opportunities for Teleperformance and Sodexo SA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teleperformance and Sodexo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Sodexo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo 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 Sodexo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodexo SA has no effect on the direction of Teleperformance i.e., Teleperformance and Sodexo SA go up and down completely randomly.
Pair Corralation between Teleperformance and Sodexo SA
Assuming the 90 days trading horizon Teleperformance SE is expected to under-perform the Sodexo SA. In addition to that, Teleperformance is 1.37 times more volatile than Sodexo SA. It trades about -0.2 of its total potential returns per unit of risk. Sodexo SA is currently generating about -0.01 per unit of volatility. If you would invest 8,115 in Sodexo SA on August 25, 2024 and sell it today you would lose (40.00) from holding Sodexo SA or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance SE vs. Sodexo SA
Performance |
| Timeline |
| Teleperformance SE |
| Sodexo SA |
Teleperformance and Sodexo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Sodexo SA
The main advantage of trading using opposite Teleperformance and Sodexo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Sodexo 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 Sodexo SA will offset losses from the drop in Sodexo SA's long position.| Teleperformance vs. Worldline SA | Teleperformance vs. Eurofins Scientific SE | Teleperformance vs. Sartorius Stedim Biotech | Teleperformance vs. Dassault Systemes SE |
| Sodexo SA vs. Accor S A | Sodexo SA vs. Publicis Groupe SA | Sodexo SA vs. Legrand SA | Sodexo SA vs. Pernod Ricard 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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