Correlation Between Dexterra and Teleperformance

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

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

Diversification Opportunities for Dexterra and Teleperformance

0.67

Correlation Coefficient

Dexterra  Teleperformance

Poor diversification

The 3 months correlation between Dexterra and Teleperformance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dexterra Group and Teleperformance PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance PK and Dexterra 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 Dexterra Group 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 PK has no effect on the direction of Dexterra i.e., Dexterra and Teleperformance go up and down completely randomly.

Pair Corralation between Dexterra and Teleperformance

Assuming the 90 days horizon Dexterra Group is expected to generate 1.13 times more return on investment than Teleperformance. However, Dexterra is 1.13 times more volatile than Teleperformance PK. It trades about 0.08 of its potential returns per unit of risk. Teleperformance PK is currently generating about 0.04 per unit of risk. If you would invest  506.00  in Dexterra Group on December 2, 2024 and sell it today you would earn a total of  34.00  from holding Dexterra Group or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	67.21%
Values	Daily Returns

Dexterra Group  vs.  Teleperformance PK

Dexterra Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dexterra Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Dexterra may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Teleperformance PK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Teleperformance PK are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Teleperformance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dexterra and Teleperformance

The main advantage of trading using opposite Dexterra and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexterra 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 Dexterra Group and Teleperformance PK 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..