Correlation Between Campbell Soup and Planet Green

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

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

Diversification Opportunities for Campbell Soup and Planet Green

-0.64

Correlation Coefficient

Campbell Soup  Planet Green

Excellent diversification

The 3 months correlation between Campbell and Planet is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Soup and Planet Green Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Green Holdings 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 Planet Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Green Holdings has no effect on the direction of Campbell Soup i.e., Campbell Soup and Planet Green go up and down completely randomly.

Pair Corralation between Campbell Soup and Planet Green

Considering the 90-day investment horizon Campbell Soup is expected to generate 0.18 times more return on investment than Planet Green. However, Campbell Soup is 5.41 times less risky than Planet Green. It trades about -0.08 of its potential returns per unit of risk. Planet Green Holdings is currently generating about -0.12 per unit of risk. If you would invest  4,445  in Campbell Soup on September 15, 2024 and sell it today you would lose (146.00) from holding Campbell Soup or give up 3.28% of portfolio value over 90 days.

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

Campbell Soup  vs.  Planet Green Holdings

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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Planet Green Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Green Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Planet Green reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Campbell Soup and Planet Green

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

The idea behind Campbell Soup and Planet Green Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.