Correlation Between Mosaic and Intrepid Potash

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

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

Diversification Opportunities for Mosaic and Intrepid Potash

0.44

Correlation Coefficient

Mosaic  Intrepid Potash

Very weak diversification

The 3 months correlation between Mosaic and Intrepid is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash and Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Intrepid Potash go up and down completely randomly.

Pair Corralation between Mosaic and Intrepid Potash

Considering the 90-day investment horizon The Mosaic is expected to generate 0.53 times more return on investment than Intrepid Potash. However, The Mosaic is 1.89 times less risky than Intrepid Potash. It trades about 0.2 of its potential returns per unit of risk. Intrepid Potash is currently generating about 0.05 per unit of risk. If you would invest  3,029  in The Mosaic on May 1, 2025 and sell it today you would earn a total of  673.00  from holding The Mosaic or generate 22.22% return on investment over 90 days.

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

The Mosaic  vs.  Intrepid Potash

Mosaic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Mosaic and Intrepid Potash

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

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.