Correlation Between Sopra Steria and Teleperformance

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

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

Diversification Opportunities for Sopra Steria and Teleperformance

-0.29

Correlation Coefficient

Sopra Steria  Teleperformance

Very good diversification

The 3 months correlation between Sopra and Teleperformance is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sopra Steria Group and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Sopra Steria 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 Sopra Steria Group 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 Sopra Steria i.e., Sopra Steria and Teleperformance go up and down completely randomly.

Pair Corralation between Sopra Steria and Teleperformance

Assuming the 90 days trading horizon Sopra Steria Group is expected to generate 0.5 times more return on investment than Teleperformance. However, Sopra Steria Group is 2.01 times less risky than Teleperformance. It trades about 0.2 of its potential returns per unit of risk. Teleperformance SE is currently generating about 0.02 per unit of risk. If you would invest  16,723  in Sopra Steria Group on April 25, 2025 and sell it today you would earn a total of  3,187  from holding Sopra Steria Group or generate 19.06% return on investment over 90 days.

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

Sopra Steria Group  vs.  Teleperformance SE

Sopra Steria Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sopra Steria Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sopra Steria sustained solid returns over the last few months and may actually be approaching a breakup point.

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. Despite somewhat strong basic indicators, Teleperformance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sopra Steria and Teleperformance

The main advantage of trading using opposite Sopra Steria and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sopra Steria 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 Sopra Steria Group 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.