Correlation Between Critic Clothing and Aerofoam Metals

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Can any of the company-specific risk be diversified away by investing in both Critic Clothing and Aerofoam 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 Critic Clothing and Aerofoam Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Critic Clothing and Aerofoam Metals, you can compare the effects of market volatilities on Critic Clothing and Aerofoam 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 Critic Clothing with a short position of Aerofoam Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critic Clothing and Aerofoam Metals.

Diversification Opportunities for Critic Clothing and Aerofoam Metals

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Critic and Aerofoam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Critic Clothing and Aerofoam Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerofoam Metals and Critic Clothing 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 Critic Clothing are associated (or correlated) with Aerofoam Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerofoam Metals has no effect on the direction of Critic Clothing i.e., Critic Clothing and Aerofoam Metals go up and down completely randomly.

Pair Corralation between Critic Clothing and Aerofoam Metals

If you would invest  0.48  in Critic Clothing on September 4, 2025 and sell it today you would earn a total of  0.12  from holding Critic Clothing or generate 25.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Critic Clothing  vs.  Aerofoam Metals

 Performance 
       Timeline  
Critic Clothing 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Critic Clothing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Critic Clothing reported solid returns over the last few months and may actually be approaching a breakup point.
Aerofoam Metals 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Aerofoam Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aerofoam Metals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Critic Clothing and Aerofoam Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Critic Clothing and Aerofoam Metals

The main advantage of trading using opposite Critic Clothing and Aerofoam Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Critic Clothing position performs unexpectedly, Aerofoam 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 Aerofoam Metals will offset losses from the drop in Aerofoam Metals' long position.
The idea behind Critic Clothing and Aerofoam Metals 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.

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