Correlation Between KS AG and Intrepid Potash

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

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

Diversification Opportunities for KS AG and Intrepid Potash

0.49

Correlation Coefficient

KS AG  Intrepid Potash

Very weak diversification

The 3 months correlation between KPLUY and Intrepid is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KS AG DRC and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash and KS AG 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 KS AG DRC 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 KS AG i.e., KS AG and Intrepid Potash go up and down completely randomly.

Pair Corralation between KS AG and Intrepid Potash

Assuming the 90 days horizon KS AG DRC is expected to under-perform the Intrepid Potash. But the otc stock apears to be less risky and, when comparing its historical volatility, KS AG DRC is 1.49 times less risky than Intrepid Potash. The otc stock trades about -0.1 of its potential returns per unit of risk. The Intrepid Potash is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,257  in Intrepid Potash on May 4, 2025 and sell it today you would lose (8.00) from holding Intrepid Potash or give up 0.25% of portfolio value over 90 days.

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

KS AG DRC  vs.  Intrepid Potash

KS AG DRC

Risk-Adjusted Performance

Very Weak

Over the last 90 days KS AG DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Intrepid Potash

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Potash are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Intrepid Potash is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with KS AG and Intrepid Potash

The main advantage of trading using opposite KS AG and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KS AG 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.

The idea behind KS AG DRC and Intrepid Potash 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.