Correlation Between Teleperformance and Aramark Holdings
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Aramark Holdings 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 Aramark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance SE and Aramark Holdings, you can compare the effects of market volatilities on Teleperformance and Aramark Holdings 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 Aramark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Aramark Holdings.
Diversification Opportunities for Teleperformance and Aramark Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Teleperformance and Aramark is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Aramark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramark Holdings 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 Aramark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramark Holdings has no effect on the direction of Teleperformance i.e., Teleperformance and Aramark Holdings go up and down completely randomly.
Pair Corralation between Teleperformance and Aramark Holdings
Assuming the 90 days horizon Teleperformance SE is expected to generate 1.97 times more return on investment than Aramark Holdings. However, Teleperformance is 1.97 times more volatile than Aramark Holdings. It trades about 0.28 of its potential returns per unit of risk. Aramark Holdings is currently generating about 0.23 per unit of risk. If you would invest 8,501 in Teleperformance SE on November 1, 2024 and sell it today you would earn a total of 1,146 from holding Teleperformance SE or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance SE vs. Aramark Holdings
Performance |
| Timeline |
| Teleperformance SE |
| Aramark Holdings |
Teleperformance and Aramark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Aramark Holdings
The main advantage of trading using opposite Teleperformance and Aramark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Aramark Holdings 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 Aramark Holdings will offset losses from the drop in Aramark Holdings' long position.| Teleperformance vs. Teleperformance PK | Teleperformance vs. SMC Corp | Teleperformance vs. Schindler Holding AG | Teleperformance vs. Straumann Holding AG |
| Aramark Holdings vs. Civeo Corp | Aramark Holdings vs. ABM Industries Incorporated | Aramark Holdings vs. ADM Endeavors | Aramark Holdings vs. Maximus |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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