Correlation Between Bridgford Foods and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods 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 Bridgford Foods and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Campbell Soup, you can compare the effects of market volatilities on Bridgford Foods 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 Bridgford Foods with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Campbell Soup.
Diversification Opportunities for Bridgford Foods and Campbell Soup
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bridgford and Campbell is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Bridgford Foods 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 Bridgford Foods 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 Bridgford Foods i.e., Bridgford Foods and Campbell Soup go up and down completely randomly.
Pair Corralation between Bridgford Foods and Campbell Soup
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Campbell Soup. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 1.06 times less risky than Campbell Soup. The stock trades about -0.26 of its potential returns per unit of risk. The Campbell Soup is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,299 in Campbell Soup on January 20, 2024 and sell it today you would earn a total of 121.00 from holding Campbell Soup or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Campbell Soup
Performance |
| Timeline |
| Bridgford Foods |
| Campbell Soup |
Bridgford Foods and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Campbell Soup
The main advantage of trading using opposite Bridgford Foods and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods 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.| Bridgford Foods vs. Green Globe International | Bridgford Foods vs. Greenlane Holdings | Bridgford Foods vs. 22nd Century Group | Bridgford Foods vs. 1606 Corp |
| Campbell Soup vs. Green Globe International | Campbell Soup vs. Greenlane Holdings | Campbell Soup vs. 22nd Century Group | Campbell Soup vs. 1606 Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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