Correlation Between Teleperformance and Sovereign Metals

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

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

Diversification Opportunities for Teleperformance and Sovereign Metals

0.0

Correlation Coefficient

Teleperformance  Sovereign Metals

Pay attention - limited upside

The 3 months correlation between Teleperformance and Sovereign is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Sovereign Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sovereign Metals 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 Sovereign Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sovereign Metals has no effect on the direction of Teleperformance i.e., Teleperformance and Sovereign Metals go up and down completely randomly.

Pair Corralation between Teleperformance and Sovereign Metals

Assuming the 90 days trading horizon Teleperformance is expected to generate 1.97 times less return on investment than Sovereign Metals. In addition to that, Teleperformance is 1.46 times more volatile than Sovereign Metals. It trades about 0.01 of its total potential returns per unit of risk. Sovereign Metals is currently generating about 0.03 per unit of volatility. If you would invest  3,500  in Sovereign Metals on April 22, 2025 and sell it today you would earn a total of  100.00  from holding Sovereign Metals or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Teleperformance SE  vs.  Sovereign Metals

Teleperformance SE

Risk-Adjusted Performance

Weak

Over the last 90 days Teleperformance SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Teleperformance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sovereign Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sovereign Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sovereign Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Teleperformance and Sovereign Metals

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

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