Correlation Between Treasury Wine and Critical Metals

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

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

Diversification Opportunities for Treasury Wine and Critical Metals

-0.05

Correlation Coefficient

Treasury Wine  Critical Metals

Good diversification

The 3 months correlation between Treasury and Critical is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates 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 Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Critical Metals go up and down completely randomly.

Pair Corralation between Treasury Wine and Critical Metals

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Critical Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 3.41 times less risky than Critical Metals. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Critical Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  838.00  in Critical Metals Corp on May 27, 2025 and sell it today you would lose (183.00) from holding Critical Metals Corp or give up 21.84% of portfolio value over 90 days.

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

Treasury Wine Estates  vs.  Critical Metals Corp

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.

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 Treasury Wine and Critical Metals

The main advantage of trading using opposite Treasury Wine and Critical Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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 Treasury Wine Estates 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.