Correlation Between Yara International and Intrepid Potash
Can any of the company-specific risk be diversified away by investing in both Yara International 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 Yara International and Intrepid Potash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and Intrepid Potash, you can compare the effects of market volatilities on Yara International 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 Yara International with a short position of Intrepid Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and Intrepid Potash.
Diversification Opportunities for Yara International and Intrepid Potash
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yara and Intrepid is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash and Yara International 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 Yara International ASA 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 Yara International i.e., Yara International and Intrepid Potash go up and down completely randomly.
Pair Corralation between Yara International and Intrepid Potash
Assuming the 90 days horizon Yara International ASA is expected to under-perform the Intrepid Potash. But the pink sheet apears to be less risky and, when comparing its historical volatility, Yara International ASA is 1.63 times less risky than Intrepid Potash. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Intrepid Potash is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,609 in Intrepid Potash on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Intrepid Potash or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. Intrepid Potash
Performance |
| Timeline |
| Yara International ASA |
| Intrepid Potash |
Yara International and Intrepid Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and Intrepid Potash
The main advantage of trading using opposite Yara International and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International 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.| Yara International vs. Boswell J G | Yara International vs. KS AG DRC | Yara International vs. ICL Israel Chemicals | Yara International 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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