Correlation Between Teleperformance and Carlsberg A/S

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

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

Diversification Opportunities for Teleperformance and Carlsberg A/S

0.84

Correlation Coefficient

Teleperformance  Carlsberg A/S

Very poor diversification

The 3 months correlation between Teleperformance and Carlsberg is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg A/S 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 Carlsberg A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg A/S has no effect on the direction of Teleperformance i.e., Teleperformance and Carlsberg A/S go up and down completely randomly.

Pair Corralation between Teleperformance and Carlsberg A/S

Assuming the 90 days horizon Teleperformance SE is expected to under-perform the Carlsberg A/S. But the pink sheet apears to be less risky and, when comparing its historical volatility, Teleperformance SE is 1.33 times less risky than Carlsberg A/S. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Carlsberg AS is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  11,428  in Carlsberg AS on October 26, 2024 and sell it today you would lose (1,373) from holding Carlsberg AS or give up 12.01% of portfolio value over 90 days.

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

Teleperformance SE  vs.  Carlsberg AS

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.

Carlsberg A/S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking 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 Teleperformance and Carlsberg A/S

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

The idea behind Teleperformance SE and Carlsberg AS 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.