Correlation Between Scotts Miracle and Intrepid Potash
Can any of the company-specific risk be diversified away by investing in both Scotts Miracle 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 Scotts Miracle and Intrepid Potash 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 Intrepid Potash, you can compare the effects of market volatilities on Scotts Miracle 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 Scotts Miracle with a short position of Intrepid Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts Miracle and Intrepid Potash.
Diversification Opportunities for Scotts Miracle and Intrepid Potash
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scotts and Intrepid is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash 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 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 Scotts Miracle i.e., Scotts Miracle and Intrepid Potash go up and down completely randomly.
Pair Corralation between Scotts Miracle and Intrepid Potash
Considering the 90-day investment horizon Scotts Miracle is expected to generate 1.09 times less return on investment than Intrepid Potash. But when comparing it to its historical volatility, Scotts Miracle Gro is 1.13 times less risky than Intrepid Potash. It trades about 0.1 of its potential returns per unit of risk. Intrepid Potash is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,940 in Intrepid Potash on March 28, 2025 and sell it today you would earn a total of 560.00 from holding Intrepid Potash or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scotts Miracle Gro vs. Intrepid Potash
Performance |
| Timeline |
| Scotts Miracle Gro |
| Intrepid Potash |
Scotts Miracle and Intrepid Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotts Miracle and Intrepid Potash
The main advantage of trading using opposite Scotts Miracle and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts Miracle 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.| Scotts Miracle vs. Corteva | Scotts Miracle vs. CF Industries Holdings | Scotts Miracle vs. American Vanguard | Scotts Miracle vs. Intrepid Potash |
| Intrepid Potash vs. Nutrien | Intrepid Potash vs. Corteva | Intrepid Potash vs. FMC Corporation | Intrepid Potash vs. CF Industries Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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