Correlation Between Elementis PLC and Critical Metals
Can any of the company-specific risk be diversified away by investing in both Elementis PLC 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 Elementis PLC and Critical Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elementis PLC and Critical Metals Plc, you can compare the effects of market volatilities on Elementis PLC 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 Elementis PLC with a short position of Critical Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elementis PLC and Critical Metals.
Diversification Opportunities for Elementis PLC and Critical Metals
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elementis and Critical is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Elementis PLC and Critical Metals Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Metals Plc and Elementis PLC 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 Elementis PLC 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 Plc has no effect on the direction of Elementis PLC i.e., Elementis PLC and Critical Metals go up and down completely randomly.
Pair Corralation between Elementis PLC and Critical Metals
Assuming the 90 days trading horizon Elementis PLC is expected to generate 0.27 times more return on investment than Critical Metals. However, Elementis PLC is 3.72 times less risky than Critical Metals. It trades about 0.26 of its potential returns per unit of risk. Critical Metals Plc is currently generating about -0.11 per unit of risk. If you would invest 12,312 in Elementis PLC on April 24, 2025 and sell it today you would earn a total of 4,348 from holding Elementis PLC or generate 35.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elementis PLC vs. Critical Metals Plc
Performance |
Timeline |
Elementis PLC |
Critical Metals Plc |
Elementis PLC and Critical Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elementis PLC and Critical Metals
The main advantage of trading using opposite Elementis PLC and Critical Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elementis PLC 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.Elementis PLC vs. Givaudan SA | Elementis PLC vs. Antofagasta PLC | Elementis PLC vs. EVRAZ plc | Elementis PLC vs. Atalaya Mining |
Critical Metals vs. Givaudan SA | Critical Metals vs. Antofagasta PLC | Critical Metals vs. EVRAZ plc | Critical Metals vs. Atalaya Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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