Correlation Between Teleperformance and Sopra Steria

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

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

Diversification Opportunities for Teleperformance and Sopra Steria

-0.29

Correlation Coefficient

Teleperformance  Sopra Steria

Very good diversification

The 3 months correlation between Teleperformance and Sopra is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance SE and Sopra Steria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sopra Steria 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 SE are associated (or correlated) with Sopra Steria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sopra Steria Group has no effect on the direction of Teleperformance i.e., Teleperformance and Sopra Steria go up and down completely randomly.

Pair Corralation between Teleperformance and Sopra Steria

Assuming the 90 days trading horizon Teleperformance is expected to generate 6.3 times less return on investment than Sopra Steria. In addition to that, Teleperformance is 2.01 times more volatile than Sopra Steria Group. It trades about 0.02 of its total potential returns per unit of risk. Sopra Steria Group is currently generating about 0.2 per unit of volatility. 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

Teleperformance SE  vs.  Sopra Steria Group

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.

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.

Pair Trading with Teleperformance and Sopra Steria

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

The idea behind Teleperformance SE and Sopra Steria 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.