Correlation Between Intrepid Potash and Argo Living

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

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

Diversification Opportunities for Intrepid Potash and Argo Living

0.21

Correlation Coefficient

Intrepid Potash  Argo Living

Modest diversification

The 3 months correlation between Intrepid and Argo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Potash and Argo Living Soils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Living Soils and Intrepid Potash 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 Intrepid Potash are associated (or correlated) with Argo Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Living Soils has no effect on the direction of Intrepid Potash i.e., Intrepid Potash and Argo Living go up and down completely randomly.

Pair Corralation between Intrepid Potash and Argo Living

Considering the 90-day investment horizon Intrepid Potash is expected to generate 5.28 times less return on investment than Argo Living. But when comparing it to its historical volatility, Intrepid Potash is 1.7 times less risky than Argo Living. It trades about 0.05 of its potential returns per unit of risk. Argo Living Soils is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Argo Living Soils on April 28, 2025 and sell it today you would earn a total of  18.00  from holding Argo Living Soils or generate 51.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intrepid Potash  vs.  Argo Living Soils

Intrepid Potash

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Potash are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Intrepid Potash may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Argo Living Soils

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Living Soils are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Argo Living reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intrepid Potash and Argo Living

The main advantage of trading using opposite Intrepid Potash and Argo Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intrepid Potash position performs unexpectedly, Argo Living 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 Argo Living will offset losses from the drop in Argo Living's long position.

The idea behind Intrepid Potash and Argo Living Soils 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.