Correlation Between Teleperformance and Cintas

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

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

Diversification Opportunities for Teleperformance and Cintas

-0.74

Correlation Coefficient

Teleperformance  Cintas

Pay attention - limited upside

The 3 months correlation between Teleperformance and Cintas is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Teleperformance PK and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 PK are associated (or correlated) with Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Teleperformance i.e., Teleperformance and Cintas go up and down completely randomly.

Pair Corralation between Teleperformance and Cintas

Assuming the 90 days horizon Teleperformance PK is expected to under-perform the Cintas. In addition to that, Teleperformance is 2.13 times more volatile than Cintas. It trades about -0.07 of its total potential returns per unit of risk. Cintas is currently generating about 0.17 per unit of volatility. If you would invest  19,949  in Cintas on September 3, 2024 and sell it today you would earn a total of  2,630  from holding Cintas or generate 13.18% return on investment over 90 days.

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

Teleperformance PK  vs.  Cintas

Teleperformance PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleperformance PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Cintas

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cintas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teleperformance and Cintas

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

The idea behind Teleperformance PK and Cintas 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.