Correlation Between Critical Metals and Axfood AB
Can any of the company-specific risk be diversified away by investing in both Critical Metals and Axfood AB 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 Axfood AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Critical Metals Plc and Axfood AB, you can compare the effects of market volatilities on Critical Metals and Axfood AB 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 Axfood AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critical Metals and Axfood AB.
Diversification Opportunities for Critical Metals and Axfood AB
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Critical and Axfood is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Critical Metals Plc and Axfood AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axfood AB 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 Plc are associated (or correlated) with Axfood AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axfood AB has no effect on the direction of Critical Metals i.e., Critical Metals and Axfood AB go up and down completely randomly.
Pair Corralation between Critical Metals and Axfood AB
Assuming the 90 days trading horizon Critical Metals Plc is expected to generate 2.2 times more return on investment than Axfood AB. However, Critical Metals is 2.2 times more volatile than Axfood AB. It trades about 0.17 of its potential returns per unit of risk. Axfood AB is currently generating about -0.15 per unit of risk. If you would invest 825.00 in Critical Metals Plc on September 10, 2025 and sell it today you would earn a total of 200.00 from holding Critical Metals Plc or generate 24.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.31% |
| Values | Daily Returns |
Critical Metals Plc vs. Axfood AB
Performance |
| Timeline |
| Critical Metals Plc |
| Axfood AB |
Critical Metals and Axfood AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Critical Metals and Axfood AB
The main advantage of trading using opposite Critical Metals and Axfood AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Critical Metals position performs unexpectedly, Axfood AB 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 Axfood AB will offset losses from the drop in Axfood AB's long position.| Critical Metals vs. Givaudan SA | Critical Metals vs. Atalaya Mining | Critical Metals vs. Amaroq Minerals | Critical Metals vs. Metals Exploration Plc |
| Axfood AB vs. Canadian General Investments | Axfood AB vs. Young Cos Brewery | Axfood AB vs. Monks Investment Trust | Axfood AB vs. Amedeo Air Four |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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