Correlation Between Critical Metals and Stratasys

Can any of the company-specific risk be diversified away by investing in both Critical Metals and Stratasys 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 Stratasys 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 Stratasys, you can compare the effects of market volatilities on Critical Metals and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critical Metals and Stratasys.

Diversification Opportunities for Critical Metals and Stratasys

-0.3

Correlation Coefficient

Critical Metals  Stratasys

Very good diversification

The 3 months correlation between Critical and Stratasys is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Critical Metals Corp and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Critical Metals i.e., Critical Metals and Stratasys go up and down completely randomly.

Pair Corralation between Critical Metals and Stratasys

Given the investment horizon of 90 days Critical Metals Corp is expected to under-perform the Stratasys. In addition to that, Critical Metals is 2.67 times more volatile than Stratasys. It trades about -0.17 of its total potential returns per unit of risk. Stratasys is currently generating about 0.06 per unit of volatility. If you would invest  926.00  in Stratasys on December 22, 2024 and sell it today you would earn a total of  93.00  from holding Stratasys or generate 10.04% return on investment over 90 days.

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

Critical Metals Corp  vs.  Stratasys

Critical Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Critical Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Stratasys

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Critical Metals and Stratasys

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

The idea behind Critical Metals Corp and Stratasys 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.