Correlation Between ACTEOS SA and ALCAT

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

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

Diversification Opportunities for ACTEOS SA and ALCAT

0.36

Correlation Coefficient

ACTEOS SA  ALCAT

Weak diversification

The 3 months correlation between ACTEOS and ALCAT is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ACTEOS SA and ALCAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALCAT and ACTEOS SA 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 ACTEOS SA are associated (or correlated) with ALCAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALCAT has no effect on the direction of ACTEOS SA i.e., ACTEOS SA and ALCAT go up and down completely randomly.

Pair Corralation between ACTEOS SA and ALCAT

Assuming the 90 days trading horizon ACTEOS SA is expected to generate 1.62 times more return on investment than ALCAT. However, ACTEOS SA is 1.62 times more volatile than ALCAT. It trades about 0.06 of its potential returns per unit of risk. ALCAT is currently generating about 0.03 per unit of risk. If you would invest  103.00  in ACTEOS SA on April 24, 2025 and sell it today you would earn a total of  12.00  from holding ACTEOS SA or generate 11.65% return on investment over 90 days.

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

ACTEOS SA  vs.  ALCAT

ACTEOS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ACTEOS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACTEOS SA sustained solid returns over the last few months and may actually be approaching a breakup point.

ALCAT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALCAT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, ALCAT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ACTEOS SA and ALCAT

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

The idea behind ACTEOS SA and ALCAT 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.