Correlation Between Critical Metals and Treasury Wine

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

By analyzing existing cross correlation between Critical Metals Corp and Treasury Wine Estates, you can compare the effects of market volatilities on Critical Metals and Treasury Wine 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 Critical Metals with a short position of Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critical Metals and Treasury Wine.

Diversification Opportunities for Critical Metals and Treasury Wine

-0.03

Correlation Coefficient

Critical Metals  Treasury Wine

Good diversification

The 3 months correlation between Critical and Treasury is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Critical Metals Corp and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates and Critical Metals 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 Critical Metals Corp are associated (or correlated) with Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of Critical Metals i.e., Critical Metals and Treasury Wine go up and down completely randomly.

Pair Corralation between Critical Metals and Treasury Wine

Given the investment horizon of 90 days Critical Metals Corp is expected to generate 8.03 times more return on investment than Treasury Wine. However, Critical Metals is 8.03 times more volatile than Treasury Wine Estates. It trades about 0.27 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.01 per unit of risk. If you would invest  142.00  in Critical Metals Corp on May 28, 2025 and sell it today you would earn a total of  581.00  from holding Critical Metals Corp or generate 409.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Critical Metals Corp  vs.  Treasury Wine Estates

Critical Metals Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Critical Metals Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent primary indicators, Critical Metals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Treasury Wine Estates

Risk-Adjusted Performance

Weakest

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Treasury Wine is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Critical Metals and Treasury Wine

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

The idea behind Critical Metals Corp and Treasury Wine Estates 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..