Correlation Between Kerry Group and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Kerry Group 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 Kerry Group and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group plc and Campbell Soup, you can compare the effects of market volatilities on Kerry Group 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 Kerry Group with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Campbell Soup.
Diversification Opportunities for Kerry Group and Campbell Soup
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kerry and Campbell is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Kerry Group 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 Kerry Group 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 Kerry Group i.e., Kerry Group and Campbell Soup go up and down completely randomly.
Pair Corralation between Kerry Group and Campbell Soup
Assuming the 90 days horizon Kerry Group is expected to generate 5.27 times less return on investment than Campbell Soup. In addition to that, Kerry Group is 1.29 times more volatile than Campbell Soup. It trades about 0.03 of its total potential returns per unit of risk. Campbell Soup is currently generating about 0.2 per unit of volatility. If you would invest 4,301 in Campbell Soup on January 26, 2024 and sell it today you would earn a total of 253.00 from holding Campbell Soup or generate 5.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kerry Group plc vs. Campbell Soup
Performance |
Timeline |
Kerry Group plc |
Campbell Soup |
Kerry Group and Campbell Soup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kerry Group and Campbell Soup
The main advantage of trading using opposite Kerry Group and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group 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.Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry Group vs. Artisan Consumer Goods |
Campbell Soup vs. General Mills | Campbell Soup vs. Hormel Foods | Campbell Soup vs. Kellanova | Campbell Soup vs. Lamb Weston Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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