Correlation Between Prudential Financial and Critical Metals

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

By analyzing existing cross correlation between Prudential Financial 4125 and Critical Metals Corp, you can compare the effects of market volatilities on Prudential Financial and Critical Metals 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 Prudential Financial with a short position of Critical Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and Critical Metals.

Diversification Opportunities for Prudential Financial and Critical Metals

0.85

Correlation Coefficient

Prudential Financial  Critical Metals

Very poor diversification

The 3 months correlation between Prudential and Critical is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial 4125 and Critical Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Metals Corp and Prudential Financial 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 Prudential Financial 4125 are associated (or correlated) with Critical Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Metals Corp has no effect on the direction of Prudential Financial i.e., Prudential Financial and Critical Metals go up and down completely randomly.

Pair Corralation between Prudential Financial and Critical Metals

Considering the 90-day investment horizon Prudential Financial is expected to generate 24.57 times less return on investment than Critical Metals. But when comparing it to its historical volatility, Prudential Financial 4125 is 16.73 times less risky than Critical Metals. It trades about 0.17 of its potential returns per unit of risk. Critical Metals Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Critical Metals Corp on May 27, 2025 and sell it today you would earn a total of  505.00  from holding Critical Metals Corp or generate 336.67% return on investment over 90 days.

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

Prudential Financial 4125  vs.  Critical Metals Corp

Prudential Financial 4125

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Financial 4125 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, Prudential Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 20 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Critical Metals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prudential Financial and Critical Metals

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

The idea behind Prudential Financial 4125 and Critical Metals Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.