Correlation Between Scotts Miracle-Gro and Nutrien

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

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

Diversification Opportunities for Scotts Miracle-Gro and Nutrien

0.6

Correlation Coefficient

Scotts Miracle-Gro  Nutrien

Poor diversification

The 3 months correlation between Scotts and Nutrien is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Scotts Miracle Gro and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien and Scotts Miracle-Gro 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 Scotts Miracle Gro are associated (or correlated) with Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Scotts Miracle-Gro i.e., Scotts Miracle-Gro and Nutrien go up and down completely randomly.

Pair Corralation between Scotts Miracle-Gro and Nutrien

Assuming the 90 days trading horizon The Scotts Miracle Gro is expected to generate 1.46 times more return on investment than Nutrien. However, Scotts Miracle-Gro is 1.46 times more volatile than Nutrien. It trades about 0.17 of its potential returns per unit of risk. Nutrien is currently generating about 0.09 per unit of risk. If you would invest  4,634  in The Scotts Miracle Gro on April 25, 2025 and sell it today you would earn a total of  1,186  from holding The Scotts Miracle Gro or generate 25.59% return on investment over 90 days.

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

The Scotts Miracle Gro  vs.  Nutrien

Scotts Miracle-Gro

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Scotts Miracle Gro are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scotts Miracle-Gro reported solid returns over the last few months and may actually be approaching a breakup point.

Nutrien

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nutrien may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Scotts Miracle-Gro and Nutrien

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

The idea behind The Scotts Miracle Gro and Nutrien 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.