Correlation Between Campbell Soup and Altria
Can any of the company-specific risk be diversified away by investing in both Campbell Soup and Altria 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 Campbell Soup and Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campbell Soup and Altria Group, you can compare the effects of market volatilities on Campbell Soup and Altria 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 Campbell Soup with a short position of Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Altria.
Diversification Opportunities for Campbell Soup and Altria
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Campbell and Altria is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group and Campbell Soup 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 Campbell Soup are associated (or correlated) with Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Campbell Soup i.e., Campbell Soup and Altria go up and down completely randomly.
Pair Corralation between Campbell Soup and Altria
Considering the 90-day investment horizon Campbell Soup is expected to generate 1.47 times more return on investment than Altria. However, Campbell Soup is 1.47 times more volatile than Altria Group. It trades about 0.2 of its potential returns per unit of risk. Altria Group is currently generating about -0.02 per unit of risk. 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Campbell Soup vs. Altria Group
Performance |
Timeline |
Campbell Soup |
Altria Group |
Campbell Soup and Altria Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Campbell Soup and Altria
The main advantage of trading using opposite Campbell Soup and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.Campbell Soup vs. General Mills | Campbell Soup vs. Hormel Foods | Campbell Soup vs. Kellanova | Campbell Soup vs. Lamb Weston Holdings |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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