Correlation Between Ipsen SA and Teleperformance

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

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

Diversification Opportunities for Ipsen SA and Teleperformance

0.03

Correlation Coefficient

Ipsen SA  Teleperformance

Significant diversification

The 3 months correlation between Ipsen and Teleperformance is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ipsen SA and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Ipsen SA 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 Ipsen SA 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 Ipsen SA i.e., Ipsen SA and Teleperformance go up and down completely randomly.

Pair Corralation between Ipsen SA and Teleperformance

Assuming the 90 days trading horizon Ipsen SA is expected to generate 0.51 times more return on investment than Teleperformance. However, Ipsen SA is 1.98 times less risky than Teleperformance. It trades about 0.02 of its potential returns per unit of risk. Teleperformance SE is currently generating about -0.05 per unit of risk. If you would invest  9,783  in Ipsen SA on September 3, 2024 and sell it today you would earn a total of  1,157  from holding Ipsen SA or generate 11.83% return on investment over 90 days.

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

Ipsen SA  vs.  Teleperformance SE

Ipsen SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ipsen SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ipsen SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ipsen SA and Teleperformance

The main advantage of trading using opposite Ipsen SA and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipsen SA 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 Ipsen SA 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.