Correlation Between Campbell Soup and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and JM Smucker 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 JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and JM Smucker, you can compare the effects of market volatilities on Campbell Soup and JM Smucker 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 JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and JM Smucker.
Diversification Opportunities for Campbell Soup and JM Smucker
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Campbell and SJM is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker 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 JM Smucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Smucker has no effect on the direction of Campbell Soup i.e., Campbell Soup and JM Smucker go up and down completely randomly.
Pair Corralation between Campbell Soup and JM Smucker
Considering the 90-day investment horizon Campbell Soup is expected to generate 1.05 times more return on investment than JM Smucker. However, Campbell Soup is 1.05 times more volatile than JM Smucker. It trades about 0.0 of its potential returns per unit of risk. JM Smucker is currently generating about -0.01 per unit of risk. If you would invest 4,566 in Campbell Soup on January 25, 2024 and sell it today you would lose (70.00) from holding Campbell Soup or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Campbell Soup vs. JM Smucker
Performance |
| Timeline |
| Campbell Soup |
| JM Smucker |
Campbell Soup and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campbell Soup and JM Smucker
The main advantage of trading using opposite Campbell Soup and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, JM Smucker 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 JM Smucker will offset losses from the drop in JM Smucker's long position.| Campbell Soup vs. Bunge Limited | Campbell Soup vs. Archer Daniels Midland | Campbell Soup vs. Fresh Del Monte | Campbell Soup vs. Limoneira Co |
| JM Smucker vs. Bunge Limited | JM Smucker vs. Archer Daniels Midland | JM Smucker vs. Fresh Del Monte | JM Smucker vs. Limoneira Co |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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