Correlation Between Intrepid Potash and Enlightify

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

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

Diversification Opportunities for Intrepid Potash and Enlightify

-0.36

Correlation Coefficient

Intrepid Potash  Enlightify

Very good diversification

The 3 months correlation between Intrepid and Enlightify is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Potash and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify 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 Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of Intrepid Potash i.e., Intrepid Potash and Enlightify go up and down completely randomly.

Pair Corralation between Intrepid Potash and Enlightify

Considering the 90-day investment horizon Intrepid Potash is expected to generate 0.76 times more return on investment than Enlightify. However, Intrepid Potash is 1.31 times less risky than Enlightify. It trades about 0.06 of its potential returns per unit of risk. Enlightify is currently generating about 0.02 per unit of risk. If you would invest  3,325  in Intrepid Potash on April 25, 2025 and sell it today you would earn a total of  326.00  from holding Intrepid Potash or generate 9.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intrepid Potash  vs.  Enlightify

Intrepid Potash

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Potash are ranked lower than 4 (%) 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.

Enlightify

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enlightify are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Enlightify is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrepid Potash and Enlightify

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

The idea behind Intrepid Potash and Enlightify 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.