As far as what's actually canon, all that's ever really been said of Algol is that he's the one who created the Soul Calibur sword from the purified remains of Soul Edge and far as I know, this is coupled with his confirmation as being the SC series' most powerful character.
That said, a majority of characters' feats lie in text and their stories, and most of it isn't up to much unless talking about the two swords and whoever's using them.
Although none of the characters' endings are canon until the next game, which usually gives insight to what actually happens.
There's not a lot of info about Algol to know his true potential. All we basically know is that he is considered one of the more powerful SC characters, can shoot energy balls, can wield miniature versions of SE and SC.
Kratos most likely wins because of the lack of info about Algol, and because Kratos has an arsenal of magic he can use.