Correlation Between Campbell Soup and Vital Farms
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Vital Farms 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 Vital Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Vital Farms, you can compare the effects of market volatilities on Campbell Soup and Vital Farms 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 Vital Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Vital Farms.
Diversification Opportunities for Campbell Soup and Vital Farms
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Campbell and Vital is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Vital Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vital Farms 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 Vital Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vital Farms has no effect on the direction of Campbell Soup i.e., Campbell Soup and Vital Farms go up and down completely randomly.
Pair Corralation between Campbell Soup and Vital Farms
Considering the 90-day investment horizon Campbell Soup is expected to under-perform the Vital Farms. But the stock apears to be less risky and, when comparing its historical volatility, Campbell Soup is 2.44 times less risky than Vital Farms. The stock trades about -0.02 of its potential returns per unit of risk. The Vital Farms is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,507 in Vital Farms on September 5, 2024 and sell it today you would earn a total of 1,907 from holding Vital Farms or generate 126.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campbell Soup vs. Vital Farms
Performance |
| Timeline |
| Campbell Soup |
| Vital Farms |
Campbell Soup and Vital Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and Vital Farms
The main advantage of trading using opposite Campbell Soup and Vital Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Vital Farms 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 Vital Farms will offset losses from the drop in Vital Farms' long position.| Campbell Soup vs. ConAgra Foods | Campbell Soup vs. Hormel Foods | Campbell Soup vs. McCormick Company Incorporated | Campbell Soup vs. Lamb Weston Holdings |
| Vital Farms vs. Fresh Del Monte | Vital Farms vs. Alico Inc | Vital Farms vs. SW Seed Company | Vital Farms vs. Adecoagro SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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