Correlation Between Teleperformance and Eurofins Scientific

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

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

Diversification Opportunities for Teleperformance and Eurofins Scientific

0.13

Correlation Coefficient

Teleperformance  Eurofins Scientific

Average diversification

The 3 months correlation between Teleperformance and Eurofins is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Eurofins Scientific SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurofins Scientific 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 SE are associated (or correlated) with Eurofins Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurofins Scientific has no effect on the direction of Teleperformance i.e., Teleperformance and Eurofins Scientific go up and down completely randomly.

Pair Corralation between Teleperformance and Eurofins Scientific

Assuming the 90 days trading horizon Teleperformance SE is expected to generate 1.14 times more return on investment than Eurofins Scientific. However, Teleperformance is 1.14 times more volatile than Eurofins Scientific SE. It trades about -0.03 of its potential returns per unit of risk. Eurofins Scientific SE is currently generating about -0.05 per unit of risk. If you would invest  9,586  in Teleperformance SE on August 31, 2024 and sell it today you would lose (684.00) from holding Teleperformance SE or give up 7.14% of portfolio value over 90 days.

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

Teleperformance SE  vs.  Eurofins Scientific SE

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 somewhat strong basic indicators, Teleperformance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eurofins Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurofins Scientific 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 strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Teleperformance and Eurofins Scientific

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

The idea behind Teleperformance SE and Eurofins Scientific 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.