Correlation Between Thales SA and ACTEOS SA

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

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

Diversification Opportunities for Thales SA and ACTEOS SA

0.65

Correlation Coefficient

Thales SA  ACTEOS SA

Poor diversification

The 3 months correlation between Thales and ACTEOS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thales SA and ACTEOS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTEOS SA and Thales 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 Thales 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 Thales SA i.e., Thales SA and ACTEOS SA go up and down completely randomly.

Pair Corralation between Thales SA and ACTEOS SA

Assuming the 90 days horizon Thales SA is expected to generate 0.97 times more return on investment than ACTEOS SA. However, Thales SA is 1.03 times less risky than ACTEOS SA. It trades about 0.35 of its potential returns per unit of risk. ACTEOS SA is currently generating about 0.06 per unit of risk. If you would invest  13,750  in Thales SA on December 29, 2024 and sell it today you would earn a total of  10,910  from holding Thales SA or generate 79.35% return on investment over 90 days.

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

Thales SA  vs.  ACTEOS SA

Thales SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Thales SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Thales SA sustained solid returns over the last few months and may actually be approaching a breakup point.

ACTEOS SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ACTEOS SA are ranked lower than 5 (%) 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 April 2025.

Pair Trading with Thales SA and ACTEOS SA

The main advantage of trading using opposite Thales SA and ACTEOS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thales SA 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 Thales 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.