Correlation Between Campbell Soup and Post Holdings
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Post Holdings 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 Post Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Post Holdings, you can compare the effects of market volatilities on Campbell Soup and Post Holdings 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 Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Post Holdings.
Diversification Opportunities for Campbell Soup and Post Holdings
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Campbell and Post is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings 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 Post Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post Holdings has no effect on the direction of Campbell Soup i.e., Campbell Soup and Post Holdings go up and down completely randomly.
Pair Corralation between Campbell Soup and Post Holdings
Considering the 90-day investment horizon Campbell Soup is expected to generate 4.03 times less return on investment than Post Holdings. In addition to that, Campbell Soup is 1.14 times more volatile than Post Holdings. It trades about 0.02 of its total potential returns per unit of risk. Post Holdings is currently generating about 0.11 per unit of volatility. If you would invest 9,287 in Post Holdings on August 28, 2024 and sell it today you would earn a total of 2,495 from holding Post Holdings or generate 26.87% 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. Post Holdings
Performance |
| Timeline |
| Campbell Soup |
| Post Holdings |
Campbell Soup and Post Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Post Holdings
The main advantage of trading using opposite Campbell Soup and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Post Holdings 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 Post Holdings will offset losses from the drop in Post Holdings' long position.| Campbell Soup vs. Bellring Brands LLC | Campbell Soup vs. Ingredion Incorporated | Campbell Soup vs. Nomad Foods | Campbell Soup vs. Simply Good Foods |
| Post Holdings vs. Simply Good Foods | Post Holdings vs. Treehouse Foods | Post Holdings vs. J J Snack | Post Holdings vs. Central Garden Pet |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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