Correlation Between Wolters Kluwer and Teleperformance

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

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

Diversification Opportunities for Wolters Kluwer and Teleperformance

0.46

Correlation Coefficient

Wolters Kluwer  Teleperformance

Very weak diversification

The 3 months correlation between Wolters and Teleperformance is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wolters Kluwer NV and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Wolters Kluwer 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 Wolters Kluwer NV 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 Wolters Kluwer i.e., Wolters Kluwer and Teleperformance go up and down completely randomly.

Pair Corralation between Wolters Kluwer and Teleperformance

Assuming the 90 days horizon Wolters Kluwer NV is expected to generate 0.4 times more return on investment than Teleperformance. However, Wolters Kluwer NV is 2.53 times less risky than Teleperformance. It trades about 0.06 of its potential returns per unit of risk. Teleperformance SE is currently generating about 0.0 per unit of risk. If you would invest  14,903  in Wolters Kluwer NV on September 24, 2024 and sell it today you would earn a total of  1,836  from holding Wolters Kluwer NV or generate 12.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.96%
Values	Daily Returns

Wolters Kluwer NV  vs.  Teleperformance SE

Wolters Kluwer NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wolters Kluwer NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Wolters Kluwer is not utilizing all of its potentials. The recent 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 weak 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.

Pair Trading with Wolters Kluwer and Teleperformance

The main advantage of trading using opposite Wolters Kluwer and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolters Kluwer 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 Wolters Kluwer NV 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..