Correlation Between JM Smucker and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both JM Smucker 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 JM Smucker and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Campbell Soup, you can compare the effects of market volatilities on JM Smucker 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 JM Smucker with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Campbell Soup.
Diversification Opportunities for JM Smucker and Campbell Soup
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SJM and Campbell is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and JM Smucker 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 JM Smucker 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 JM Smucker i.e., JM Smucker and Campbell Soup go up and down completely randomly.
Pair Corralation between JM Smucker and Campbell Soup
Considering the 90-day investment horizon JM Smucker is expected to under-perform the Campbell Soup. In addition to that, JM Smucker is 1.15 times more volatile than Campbell Soup. It trades about -0.1 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 | 95.45% |
| Values | Daily Returns |
JM Smucker vs. Campbell Soup
Performance |
| Timeline |
| JM Smucker |
| Campbell Soup |
JM Smucker and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Campbell Soup
The main advantage of trading using opposite JM Smucker and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker 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.| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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