Correlation Between Fresh Del and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Fresh Del 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 Fresh Del and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Del Monte and Campbell Soup, you can compare the effects of market volatilities on Fresh Del 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 Fresh Del with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and Campbell Soup.
Diversification Opportunities for Fresh Del and Campbell Soup
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fresh and Campbell is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Fresh Del 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 Fresh Del Monte 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 Fresh Del i.e., Fresh Del and Campbell Soup go up and down completely randomly.
Pair Corralation between Fresh Del and Campbell Soup
Considering the 90-day investment horizon Fresh Del Monte is expected to generate 1.3 times more return on investment than Campbell Soup. However, Fresh Del is 1.3 times more volatile than Campbell Soup. It trades about 0.04 of its potential returns per unit of risk. Campbell Soup is currently generating about -0.01 per unit of risk. If you would invest 2,548 in Fresh Del Monte on August 23, 2024 and sell it today you would earn a total of 812.00 from holding Fresh Del Monte or generate 31.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Del Monte vs. Campbell Soup
Performance |
| Timeline |
| Fresh Del Monte |
| Campbell Soup |
Fresh Del and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Del and Campbell Soup
The main advantage of trading using opposite Fresh Del and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del 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.| Fresh Del vs. Limoneira Co | Fresh Del vs. Alico Inc | Fresh Del vs. Adecoagro SA | Fresh Del vs. Cal Maine Foods |
| Campbell Soup vs. Better Choice | Campbell Soup vs. BioAdaptives | Campbell Soup vs. Beyond Oil | Campbell Soup vs. Bon Natural Life |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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