Correlation Between Dole PLC and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Dole PLC and Campbell Soup 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 Dole PLC and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dole PLC and Campbell Soup, you can compare the effects of market volatilities on Dole PLC and Campbell Soup 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 Dole PLC with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dole PLC and Campbell Soup.
Diversification Opportunities for Dole PLC and Campbell Soup
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dole and Campbell is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dole PLC and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Dole PLC 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 Dole PLC are associated (or correlated) with Campbell Soup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campbell Soup has no effect on the direction of Dole PLC i.e., Dole PLC and Campbell Soup go up and down completely randomly.
Pair Corralation between Dole PLC and Campbell Soup
Given the investment horizon of 90 days Dole PLC is expected to under-perform the Campbell Soup. In addition to that, Dole PLC is 1.44 times more volatile than Campbell Soup. It trades about -0.22 of its total potential returns per unit of risk. Campbell Soup is currently generating about -0.09 per unit of volatility. If you would invest 4,476 in Campbell Soup on September 12, 2024 and sell it today you would lose (165.00) from holding Campbell Soup or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dole PLC vs. Campbell Soup
Performance |
| Timeline |
| Dole PLC |
| Campbell Soup |
Dole PLC and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dole PLC and Campbell Soup
The main advantage of trading using opposite Dole PLC and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dole PLC position performs unexpectedly, Campbell Soup 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 Campbell Soup will offset losses from the drop in Campbell Soup's long position.| Dole PLC vs. Limoneira Co | Dole PLC vs. Alico Inc | Dole PLC vs. Adecoagro SA | Dole PLC vs. Fresh Del Monte |
| Campbell Soup vs. J J Snack | Campbell Soup vs. Central Garden Pet | Campbell Soup vs. Central Garden Pet | Campbell Soup vs. Lancaster Colony |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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