Correlation Between Campbell Soup and Lery Seafood

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

By analyzing existing cross correlation between Campbell Soup and Lery Seafood Group, you can compare the effects of market volatilities on Campbell Soup and Lery Seafood 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 Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Soup and Lery Seafood.

Diversification Opportunities for Campbell Soup and Lery Seafood

0.44

Correlation Coefficient

Campbell Soup  Lery Seafood

Very weak diversification

The 3 months correlation between Campbell and Lery is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Campbell Soup i.e., Campbell Soup and Lery Seafood go up and down completely randomly.

Pair Corralation between Campbell Soup and Lery Seafood

Considering the 90-day investment horizon Campbell Soup is expected to under-perform the Lery Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Campbell Soup is 1.73 times less risky than Lery Seafood. The stock trades about -0.02 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  477.00  in Lery Seafood Group on September 5, 2024 and sell it today you would lose (2.00) from holding Lery Seafood Group or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	64.44%
Values	Daily Returns

Campbell Soup  vs.  Lery Seafood Group

Campbell Soup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Campbell Soup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Campbell Soup and Lery Seafood

The main advantage of trading using opposite Campbell Soup and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campbell Soup position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.

The idea behind Campbell Soup and Lery Seafood Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .