Correlation Between MagIndustries Corp and Intrepid Potash

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

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

Diversification Opportunities for MagIndustries Corp and Intrepid Potash

0.0

Correlation Coefficient

MagIndustries Corp  Intrepid Potash

Pay attention - limited upside

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

Pair Corralation between MagIndustries Corp and Intrepid Potash

If you would invest  2,232  in Intrepid Potash on October 22, 2024 and sell it today you would earn a total of  419.00  from holding Intrepid Potash or generate 18.77% return on investment over 90 days.

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

MagIndustries Corp  vs.  Intrepid Potash

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.

Intrepid Potash

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Potash are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Intrepid Potash may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MagIndustries Corp and Intrepid Potash

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

The idea behind MagIndustries Corp and Intrepid Potash 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.