Correlation Between KS AG and Intrepid Potash
Can any of the company-specific risk be diversified away by investing in both KS AG 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 KS AG and Intrepid Potash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KS AG DRC and Intrepid Potash, you can compare the effects of market volatilities on KS AG 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 KS AG with a short position of Intrepid Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of KS AG and Intrepid Potash.
Diversification Opportunities for KS AG and Intrepid Potash
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KPLUY and Intrepid is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KS AG DRC and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash and KS AG 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 KS AG DRC 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 KS AG i.e., KS AG and Intrepid Potash go up and down completely randomly.
Pair Corralation between KS AG and Intrepid Potash
Assuming the 90 days horizon KS AG DRC is expected to under-perform the Intrepid Potash. In addition to that, KS AG is 1.07 times more volatile than Intrepid Potash. It trades about -0.02 of its total potential returns per unit of risk. Intrepid Potash is currently generating about 0.14 per unit of volatility. If you would invest 2,502 in Intrepid Potash on August 31, 2024 and sell it today you would earn a total of 206.00 from holding Intrepid Potash or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KS AG DRC vs. Intrepid Potash
Performance |
| Timeline |
| KS AG DRC |
| Intrepid Potash |
KS AG and Intrepid Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KS AG and Intrepid Potash
The main advantage of trading using opposite KS AG and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KS AG 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.| KS AG vs. Yara International ASA | KS AG vs. Boswell J G | KS AG vs. ICL Israel Chemicals | KS AG vs. CF Industries Holdings |
| Intrepid Potash vs. The Mosaic | Intrepid Potash vs. Nutrien | Intrepid Potash vs. Corteva | Intrepid Potash vs. FMC Corporation |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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