Correlation Between Campbell Soup and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Premier Foods 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 Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Premier Foods Plc, you can compare the effects of market volatilities on Campbell Soup and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Premier Foods.
Diversification Opportunities for Campbell Soup and Premier Foods
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Campbell and Premier is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Premier Foods Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods Plc 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods Plc has no effect on the direction of Campbell Soup i.e., Campbell Soup and Premier Foods go up and down completely randomly.
Pair Corralation between Campbell Soup and Premier Foods
Considering the 90-day investment horizon Campbell Soup is expected to under-perform the Premier Foods. But the stock apears to be less risky and, when comparing its historical volatility, Campbell Soup is 1.69 times less risky than Premier Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Premier Foods Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 132.00 in Premier Foods Plc on November 2, 2024 and sell it today you would earn a total of 76.00 from holding Premier Foods Plc or generate 57.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 40.77% |
| Values | Daily Returns |
Campbell Soup vs. Premier Foods Plc
Performance |
| Timeline |
| Campbell Soup |
| Premier Foods Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Campbell Soup and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Premier Foods
The main advantage of trading using opposite Campbell Soup and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Campbell Soup vs. General Mills | Campbell Soup vs. Hormel Foods | Campbell Soup vs. Kellanova | Campbell Soup vs. Lamb Weston Holdings |
| Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. Naturally Splendid Enterprises | Premier Foods vs. Aryzta AG PK | Premier Foods vs. Premier Foods Plc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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