Correlation Between Teleperformance and Techtronic Industries

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

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

Diversification Opportunities for Teleperformance and Techtronic Industries

0.12

Correlation Coefficient

Teleperformance  Techtronic Industries

Average diversification

The 3 months correlation between Teleperformance and Techtronic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Techtronic Industries Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techtronic Industries 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 Techtronic Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techtronic Industries has no effect on the direction of Teleperformance i.e., Teleperformance and Techtronic Industries go up and down completely randomly.

Pair Corralation between Teleperformance and Techtronic Industries

Assuming the 90 days horizon Teleperformance SE is expected to under-perform the Techtronic Industries. In addition to that, Teleperformance is 1.28 times more volatile than Techtronic Industries Ltd. It trades about -0.1 of its total potential returns per unit of risk. Techtronic Industries Ltd is currently generating about 0.06 per unit of volatility. If you would invest  6,655  in Techtronic Industries Ltd on September 3, 2024 and sell it today you would earn a total of  443.00  from holding Techtronic Industries Ltd or generate 6.66% return on investment over 90 days.

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

Teleperformance SE  vs.  Techtronic Industries Ltd

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Techtronic Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Techtronic Industries Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Techtronic Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Teleperformance and Techtronic Industries

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

The idea behind Teleperformance SE and Techtronic Industries Ltd 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.