Correlation Between Campbell Soup and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Coffee Holding 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 Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Coffee Holding Co, you can compare the effects of market volatilities on Campbell Soup and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Coffee Holding.
Diversification Opportunities for Campbell Soup and Coffee Holding
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Campbell and Coffee is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of Campbell Soup i.e., Campbell Soup and Coffee Holding go up and down completely randomly.
Pair Corralation between Campbell Soup and Coffee Holding
Considering the 90-day investment horizon Campbell Soup is expected to under-perform the Coffee Holding. But the stock apears to be less risky and, when comparing its historical volatility, Campbell Soup is 2.85 times less risky than Coffee Holding. The stock trades about -0.2 of its potential returns per unit of risk. The Coffee Holding Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 319.00 in Coffee Holding Co on August 24, 2024 and sell it today you would earn a total of 44.00 from holding Coffee Holding Co or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campbell Soup vs. Coffee Holding Co
Performance |
| Timeline |
| Campbell Soup |
| Coffee Holding |
Campbell Soup and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Coffee Holding
The main advantage of trading using opposite Campbell Soup and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| Campbell Soup vs. Better Choice | Campbell Soup vs. BioAdaptives | Campbell Soup vs. Beyond Oil | Campbell Soup vs. Bon Natural Life |
| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. Natures Sunshine Products | Coffee Holding vs. J J Snack | Coffee Holding vs. John B Sanfilippo |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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