Correlation Between Campbell Soup and Better Choice
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Better Choice 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 Campbell Soup and Better Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Better Choice, you can compare the effects of market volatilities on Campbell Soup and Better Choice 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 Campbell Soup with a short position of Better Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Better Choice.
Diversification Opportunities for Campbell Soup and Better Choice
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Campbell and Better is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Better Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Choice and Campbell Soup 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 Campbell Soup are associated (or correlated) with Better Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Choice has no effect on the direction of Campbell Soup i.e., Campbell Soup and Better Choice go up and down completely randomly.
Pair Corralation between Campbell Soup and Better Choice
Considering the 90-day investment horizon Campbell Soup is expected to generate 0.18 times more return on investment than Better Choice. However, Campbell Soup is 5.63 times less risky than Better Choice. It trades about 0.01 of its potential returns per unit of risk. Better Choice is currently generating about -0.07 per unit of risk. If you would invest 4,386 in Campbell Soup on August 24, 2024 and sell it today you would earn a total of 60.00 from holding Campbell Soup or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campbell Soup vs. Better Choice
Performance |
| Timeline |
| Campbell Soup |
| Better Choice |
Campbell Soup and Better Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Better Choice
The main advantage of trading using opposite Campbell Soup and Better Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Better Choice 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 Better Choice will offset losses from the drop in Better Choice's long position.| Campbell Soup vs. Better Choice | Campbell Soup vs. BioAdaptives | Campbell Soup vs. Beyond Oil | Campbell Soup vs. Bon Natural Life |
| Better Choice vs. Blue Star Foods | Better Choice vs. Stryve Foods | Better Choice vs. BioAdaptives | Better Choice vs. Beyond Oil |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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