Correlation Between Intrepid Potash and MagIndustries Corp

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

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

Diversification Opportunities for Intrepid Potash and MagIndustries Corp

0.0

Correlation Coefficient

Intrepid Potash  MagIndustries Corp

Pay attention - limited upside

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

Pair Corralation between Intrepid Potash and MagIndustries Corp

If you would invest  0.01  in MagIndustries Corp on October 10, 2024 and sell it today you would earn a total of  0.00  from holding MagIndustries Corp or generate 0.0% return on investment over 90 days.

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

Intrepid Potash  vs.  MagIndustries Corp

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.

MagIndustries Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MagIndustries Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, MagIndustries Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Intrepid Potash and MagIndustries Corp

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

The idea behind Intrepid Potash and MagIndustries Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.