Correlation Between Teleperformance and Vallourec
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Vallourec 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 Vallourec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance SE and Vallourec, you can compare the effects of market volatilities on Teleperformance and Vallourec 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 Vallourec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Vallourec.
Diversification Opportunities for Teleperformance and Vallourec
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teleperformance and Vallourec is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Vallourec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vallourec 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 Vallourec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vallourec has no effect on the direction of Teleperformance i.e., Teleperformance and Vallourec go up and down completely randomly.
Pair Corralation between Teleperformance and Vallourec
Assuming the 90 days trading horizon Teleperformance is expected to generate 1.38 times less return on investment than Vallourec. But when comparing it to its historical volatility, Teleperformance SE is 1.06 times less risky than Vallourec. It trades about 0.17 of its potential returns per unit of risk. Vallourec is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,688 in Vallourec on November 5, 2024 and sell it today you would earn a total of 151.00 from holding Vallourec or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance SE vs. Vallourec
Performance |
| Timeline |
| Teleperformance SE |
| Vallourec |
Teleperformance and Vallourec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Vallourec
The main advantage of trading using opposite Teleperformance and Vallourec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Vallourec 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 Vallourec will offset losses from the drop in Vallourec'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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