Correlation Between ADM Endeavors and Teleperformance

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

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

Diversification Opportunities for ADM Endeavors and Teleperformance

0.14

Correlation Coefficient

ADM Endeavors  Teleperformance

Average diversification

The 3 months correlation between ADM and Teleperformance is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ADM Endeavors and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and ADM Endeavors 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 ADM Endeavors 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 ADM Endeavors i.e., ADM Endeavors and Teleperformance go up and down completely randomly.

Pair Corralation between ADM Endeavors and Teleperformance

Given the investment horizon of 90 days ADM Endeavors is expected to generate 2.97 times more return on investment than Teleperformance. However, ADM Endeavors is 2.97 times more volatile than Teleperformance SE. It trades about 0.01 of its potential returns per unit of risk. Teleperformance SE is currently generating about -0.05 per unit of risk. If you would invest  5.43  in ADM Endeavors on September 12, 2024 and sell it today you would lose (0.83) from holding ADM Endeavors or give up 15.29% of portfolio value over 90 days.

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

ADM Endeavors  vs.  Teleperformance SE

ADM Endeavors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADM Endeavors has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, ADM Endeavors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Teleperformance SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleperformance SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ADM Endeavors and Teleperformance

The main advantage of trading using opposite ADM Endeavors and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADM Endeavors 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 ADM Endeavors 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.