Correlation Between Intrepid Potash and Igene Biotechnology

Can any of the company-specific risk be diversified away by investing in both Intrepid Potash and Igene Biotechnology 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 Intrepid Potash and Igene Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intrepid Potash and Igene Biotechnology, you can compare the effects of market volatilities on Intrepid Potash and Igene Biotechnology 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 Intrepid Potash with a short position of Igene Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Potash and Igene Biotechnology.

Diversification Opportunities for Intrepid Potash and Igene Biotechnology

0.0

Correlation Coefficient

Intrepid Potash  Igene Biotechnology

Pay attention - limited upside

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

Pair Corralation between Intrepid Potash and Igene Biotechnology

If you would invest  0.00  in Igene Biotechnology on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Igene Biotechnology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Intrepid Potash  vs.  Igene Biotechnology

Intrepid Potash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrepid Potash has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Intrepid Potash is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Igene Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Igene Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Igene Biotechnology is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Intrepid Potash and Igene Biotechnology

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

The idea behind Intrepid Potash and Igene Biotechnology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.