Correlation Between Teleperformance and Compass Group

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

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

Diversification Opportunities for Teleperformance and Compass Group

0.53

Correlation Coefficient

Teleperformance  Compass Group

Very weak diversification

The 3 months correlation between Teleperformance and Compass is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC 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 Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of Teleperformance i.e., Teleperformance and Compass Group go up and down completely randomly.

Pair Corralation between Teleperformance and Compass Group

Assuming the 90 days trading horizon Teleperformance SE is expected to generate 2.4 times more return on investment than Compass Group. However, Teleperformance is 2.4 times more volatile than Compass Group PLC. It trades about 0.02 of its potential returns per unit of risk. Compass Group PLC is currently generating about 0.0 per unit of risk. If you would invest  8,507  in Teleperformance SE on April 20, 2025 and sell it today you would earn a total of  122.00  from holding Teleperformance SE or generate 1.43% return on investment over 90 days.

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

Teleperformance SE  vs.  Compass Group PLC

Teleperformance SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teleperformance SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Teleperformance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Compass Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compass Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Compass Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Teleperformance and Compass Group

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

The idea behind Teleperformance SE and Compass Group PLC 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.