Correlation Between Campbell Soup and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Chevron Corp 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 Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Chevron Corp, you can compare the effects of market volatilities on Campbell Soup and Chevron Corp 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 Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Chevron Corp.
Diversification Opportunities for Campbell Soup and Chevron Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Campbell and Chevron is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp 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 Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Campbell Soup i.e., Campbell Soup and Chevron Corp go up and down completely randomly.
Pair Corralation between Campbell Soup and Chevron Corp
Considering the 90-day investment horizon Campbell Soup is expected to generate 1.24 times more return on investment than Chevron Corp. However, Campbell Soup is 1.24 times more volatile than Chevron Corp. It trades about 0.17 of its potential returns per unit of risk. Chevron Corp is currently generating about 0.14 per unit of risk. If you would invest 4,226 in Campbell Soup on December 29, 2023 and sell it today you would earn a total of 181.00 from holding Campbell Soup or generate 4.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Campbell Soup vs. Chevron Corp
Performance |
Timeline |
Campbell Soup |
Chevron Corp |
Campbell Soup and Chevron Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Campbell Soup and Chevron Corp
The main advantage of trading using opposite Campbell Soup and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.Campbell Soup vs. Bunge Limited | Campbell Soup vs. Altria Group | Campbell Soup vs. Philip Morris International | Campbell Soup vs. Everest Consolidator Acquisition |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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