Correlation Between Solocal Group and ACTEOS SA

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

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

Diversification Opportunities for Solocal Group and ACTEOS SA

-0.52

Correlation Coefficient

Solocal Group  ACTEOS SA

Excellent diversification

The 3 months correlation between Solocal and ACTEOS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Solocal Group SA and ACTEOS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTEOS SA and Solocal Group 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 Solocal Group SA are associated (or correlated) with ACTEOS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACTEOS SA has no effect on the direction of Solocal Group i.e., Solocal Group and ACTEOS SA go up and down completely randomly.

Pair Corralation between Solocal Group and ACTEOS SA

Assuming the 90 days trading horizon Solocal Group SA is expected to under-perform the ACTEOS SA. But the stock apears to be less risky and, when comparing its historical volatility, Solocal Group SA is 2.54 times less risky than ACTEOS SA. The stock trades about -0.01 of its potential returns per unit of risk. The ACTEOS SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  107.00  in ACTEOS SA on April 22, 2025 and sell it today you would earn a total of  7.00  from holding ACTEOS SA or generate 6.54% return on investment over 90 days.

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

Solocal Group SA  vs.  ACTEOS SA

Solocal Group SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solocal Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Solocal Group is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

ACTEOS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ACTEOS SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACTEOS SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Solocal Group and ACTEOS SA

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

The idea behind Solocal Group SA and ACTEOS SA 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.