Correlation Between N2OFF and Intrepid Potash

Can any of the company-specific risk be diversified away by investing in both N2OFF 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 N2OFF and Intrepid Potash into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between N2OFF Inc and Intrepid Potash, you can compare the effects of market volatilities on N2OFF 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 N2OFF with a short position of Intrepid Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of N2OFF and Intrepid Potash.

Diversification Opportunities for N2OFF and Intrepid Potash

-0.26

Correlation Coefficient

N2OFF  Intrepid Potash

Very good diversification

The 3 months correlation between N2OFF and Intrepid is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding N2OFF Inc and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash and N2OFF 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 N2OFF Inc 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 N2OFF i.e., N2OFF and Intrepid Potash go up and down completely randomly.

Pair Corralation between N2OFF and Intrepid Potash

Given the investment horizon of 90 days N2OFF Inc is expected to generate 15.74 times more return on investment than Intrepid Potash. However, N2OFF is 15.74 times more volatile than Intrepid Potash. It trades about 0.09 of its potential returns per unit of risk. Intrepid Potash is currently generating about 0.2 per unit of risk. If you would invest  28.00  in N2OFF Inc on December 29, 2024 and sell it today you would lose (3.00) from holding N2OFF Inc or give up 10.71% of portfolio value over 90 days.

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

N2OFF Inc  vs.  Intrepid Potash

N2OFF Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in N2OFF Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, N2OFF displayed solid returns over the last few months and may actually be approaching a breakup point.

Intrepid Potash

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Potash are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Intrepid Potash demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with N2OFF and Intrepid Potash

The main advantage of trading using opposite N2OFF and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N2OFF 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 N2OFF Inc 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.