Correlation Between Scotts Miracle and Nutrien

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Can any of the company-specific risk be diversified away by investing in both Scotts Miracle and Nutrien 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 Scotts Miracle and Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scotts Miracle Gro and Nutrien, you can compare the effects of market volatilities on Scotts Miracle and Nutrien 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 Scotts Miracle with a short position of Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts Miracle and Nutrien.

Diversification Opportunities for Scotts Miracle and Nutrien

ScottsNutrienDiversified AwayScottsNutrienDiversified Away100%
-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Scotts and Nutrien is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien and Scotts Miracle 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 Scotts Miracle Gro are associated (or correlated) with Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Scotts Miracle i.e., Scotts Miracle and Nutrien go up and down completely randomly.

Pair Corralation between Scotts Miracle and Nutrien

Considering the 90-day investment horizon Scotts Miracle Gro is expected to under-perform the Nutrien. In addition to that, Scotts Miracle is 1.07 times more volatile than Nutrien. It trades about -0.21 of its total potential returns per unit of risk. Nutrien is currently generating about 0.15 per unit of volatility. If you would invest  4,534  in Nutrien on November 26, 2024 and sell it today you would earn a total of  725.00  from holding Nutrien or generate 15.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Scotts Miracle Gro  vs.  Nutrien

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15SMG NTR
       Timeline  
Scotts Miracle Gro 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Scotts Miracle Gro has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6065707580
Nutrien 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Nutrien reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44464850525456

Scotts Miracle and Nutrien Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.54-2.65-1.76-0.870.00.781.552.333.11 0.060.080.100.12
JavaScript chart by amCharts 3.21.15SMG NTR
       Returns  

Pair Trading with Scotts Miracle and Nutrien

The main advantage of trading using opposite Scotts Miracle and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts Miracle position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.
The idea behind Scotts Miracle Gro and Nutrien 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.

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