Correlation Between Clasquin and Teleperformance

Can any of the company-specific risk be diversified away by investing in both Clasquin and Teleperformance 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 Clasquin and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clasquin and Teleperformance SE, you can compare the effects of market volatilities on Clasquin and Teleperformance 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 Clasquin with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clasquin and Teleperformance.

Diversification Opportunities for Clasquin and Teleperformance

0.3

Correlation Coefficient

Clasquin  Teleperformance

Weak diversification

The 3 months correlation between Clasquin and Teleperformance is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clasquin and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Clasquin 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 Clasquin are associated (or correlated) with Teleperformance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleperformance SE has no effect on the direction of Clasquin i.e., Clasquin and Teleperformance go up and down completely randomly.

Pair Corralation between Clasquin and Teleperformance

Assuming the 90 days trading horizon Clasquin is expected to generate 3.09 times less return on investment than Teleperformance. But when comparing it to its historical volatility, Clasquin is 2.5 times less risky than Teleperformance. It trades about 0.12 of its potential returns per unit of risk. Teleperformance SE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8,180  in Teleperformance SE on March 13, 2024 and sell it today you would earn a total of  2,075  from holding Teleperformance SE or generate 25.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Clasquin  vs.  Teleperformance SE

Clasquin

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clasquin are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Clasquin may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Teleperformance SE

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teleperformance SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Teleperformance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clasquin and Teleperformance

The main advantage of trading using opposite Clasquin and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clasquin position performs unexpectedly, Teleperformance 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 Teleperformance will offset losses from the drop in Teleperformance's long position.

The idea behind Clasquin and Teleperformance SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.