Correlation Between 111 and Campbell Soup

Can any of the company-specific risk be diversified away by investing in both 111 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 111 and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and Campbell Soup, you can compare the effects of market volatilities on 111 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 111 with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and Campbell Soup.

Diversification Opportunities for 111 and Campbell Soup

-0.62

Correlation Coefficient

111  Campbell Soup

Excellent diversification

The 3 months correlation between 111 and Campbell is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and 111 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 111 Inc 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 111 i.e., 111 and Campbell Soup go up and down completely randomly.

Pair Corralation between 111 and Campbell Soup

Allowing for the 90-day total investment horizon 111 Inc is expected to generate 2.82 times more return on investment than Campbell Soup. However, 111 is 2.82 times more volatile than Campbell Soup. It trades about 0.05 of its potential returns per unit of risk. Campbell Soup is currently generating about 0.14 per unit of risk. If you would invest  112.00  in 111 Inc on February 5, 2024 and sell it today you would earn a total of  3.00  from holding 111 Inc or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

111 Inc  vs.  Campbell Soup

111 Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 111 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Campbell Soup

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Campbell Soup are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Campbell Soup is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 111 and Campbell Soup

The main advantage of trading using opposite 111 and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 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.

The idea behind 111 Inc and Campbell Soup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.