Correlation Between Lamb Weston and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Lamb Weston 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 Lamb Weston and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamb Weston Holdings and Campbell Soup, you can compare the effects of market volatilities on Lamb Weston 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 Lamb Weston with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamb Weston and Campbell Soup.
Diversification Opportunities for Lamb Weston and Campbell Soup
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamb and Campbell is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lamb Weston Holdings and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Lamb Weston 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 Lamb Weston Holdings 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 Lamb Weston i.e., Lamb Weston and Campbell Soup go up and down completely randomly.
Pair Corralation between Lamb Weston and Campbell Soup
Allowing for the 90-day total investment horizon Lamb Weston Holdings is expected to under-perform the Campbell Soup. In addition to that, Lamb Weston is 2.15 times more volatile than Campbell Soup. It trades about -0.11 of its total potential returns per unit of risk. Campbell Soup is currently generating about 0.04 per unit of volatility. If you would invest 4,387 in Campbell Soup on January 25, 2024 and sell it today you would earn a total of 109.00 from holding Campbell Soup or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamb Weston Holdings vs. Campbell Soup
Performance |
| Timeline |
| Lamb Weston Holdings |
| Campbell Soup |
Lamb Weston and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamb Weston and Campbell Soup
The main advantage of trading using opposite Lamb Weston and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamb Weston 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.| Lamb Weston vs. Bunge Limited | Lamb Weston vs. Archer Daniels Midland | Lamb Weston vs. Fresh Del Monte | Lamb Weston vs. Limoneira Co |
| Campbell Soup vs. Bunge Limited | Campbell Soup vs. Archer Daniels Midland | Campbell Soup vs. Fresh Del Monte | Campbell Soup 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |