Correlation Between Teleperformance and Dexterra

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

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

Diversification Opportunities for Teleperformance and Dexterra

0.67

Correlation Coefficient

Teleperformance  Dexterra

Poor diversification

The 3 months correlation between Teleperformance and Dexterra is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance PK and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 PK are associated (or correlated) with Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Teleperformance i.e., Teleperformance and Dexterra go up and down completely randomly.

Pair Corralation between Teleperformance and Dexterra

Assuming the 90 days horizon Teleperformance is expected to generate 2.24 times less return on investment than Dexterra. But when comparing it to its historical volatility, Teleperformance PK is 1.13 times less risky than Dexterra. It trades about 0.04 of its potential returns per unit of risk. Dexterra Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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

Teleperformance PK  vs.  Dexterra Group

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.

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.

Pair Trading with Teleperformance and Dexterra

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

The idea behind Teleperformance PK and Dexterra Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.