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
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Campbell and Premier is -0.45. 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 generate 1.31 times more return on investment than Premier Foods. However, Campbell Soup is 1.31 times more volatile than Premier Foods Plc. It trades about -0.04 of its potential returns per unit of risk. Premier Foods Plc is currently generating about -0.21 per unit of risk. If you would invest 4,668 in Campbell Soup on August 31, 2024 and sell it today you would lose (61.00) from holding Campbell Soup or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campbell Soup vs. Premier Foods Plc
Performance |
| Timeline |
| Campbell Soup |
| Premier Foods Plc |
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. The A2 Milk | Premier Foods vs. Altavoz Entertainment | Premier Foods vs. Artisan Consumer Goods | Premier Foods vs. General Mills |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |