Correlation Between Teleperformance and Sodexo PK
Can any of the company-specific risk be diversified away by investing in both Teleperformance and Sodexo PK 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 PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleperformance PK and Sodexo PK, you can compare the effects of market volatilities on Teleperformance and Sodexo PK 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 PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleperformance and Sodexo PK.
Diversification Opportunities for Teleperformance and Sodexo PK
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teleperformance and Sodexo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance PK and Sodexo PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sodexo PK 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 PK are associated (or correlated) with Sodexo PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sodexo PK has no effect on the direction of Teleperformance i.e., Teleperformance and Sodexo PK go up and down completely randomly.
Pair Corralation between Teleperformance and Sodexo PK
Assuming the 90 days horizon Teleperformance PK is expected to under-perform the Sodexo PK. In addition to that, Teleperformance is 1.83 times more volatile than Sodexo PK. It trades about -0.26 of its total potential returns per unit of risk. Sodexo PK is currently generating about -0.16 per unit of volatility. If you would invest 1,774 in Sodexo PK on August 28, 2024 and sell it today you would lose (74.00) from holding Sodexo PK or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleperformance PK vs. Sodexo PK
Performance |
| Timeline |
| Teleperformance PK |
| Sodexo PK |
Teleperformance and Sodexo PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleperformance and Sodexo PK
The main advantage of trading using opposite Teleperformance and Sodexo PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleperformance position performs unexpectedly, Sodexo PK 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 PK will offset losses from the drop in Sodexo PK's long position.| Teleperformance vs. Dexterra Group | Teleperformance vs. Intertek Group Plc | Teleperformance vs. Wildpack Beverage | Teleperformance vs. DATA Communications Management |
| Sodexo PK vs. FitLife Brands, Common | Sodexo PK vs. HUMANA INC | Sodexo PK vs. SCOR PK | Sodexo PK vs. Aquagold International |
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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