Correlation Between IDS France and ACTEOS SA

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

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

Diversification Opportunities for IDS France and ACTEOS SA

-0.6

Correlation Coefficient

IDS France  ACTEOS SA

Excellent diversification

The 3 months correlation between IDS and ACTEOS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding IDS France SAS and ACTEOS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTEOS SA and IDS France 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 IDS France SAS 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 IDS France i.e., IDS France and ACTEOS SA go up and down completely randomly.

Pair Corralation between IDS France and ACTEOS SA

Assuming the 90 days trading horizon IDS France SAS is expected to under-perform the ACTEOS SA. In addition to that, IDS France is 1.69 times more volatile than ACTEOS SA. It trades about -0.11 of its total potential returns per unit of risk. ACTEOS SA is currently generating about 0.03 per unit of volatility. If you would invest  96.00  in ACTEOS SA on December 23, 2024 and sell it today you would earn a total of  3.00  from holding ACTEOS SA or generate 3.13% return on investment over 90 days.

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

IDS France SAS  vs.  ACTEOS SA

IDS France SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDS France SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ACTEOS SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ACTEOS SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ACTEOS SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IDS France and ACTEOS SA

The main advantage of trading using opposite IDS France and ACTEOS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDS France 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 IDS France SAS 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.