Correlation Between China Marine and Campbell Soup

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

By analyzing existing cross correlation between China Marine Food and Campbell Soup, you can compare the effects of market volatilities on China Marine 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 China Marine with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Marine and Campbell Soup.

Diversification Opportunities for China Marine and Campbell Soup

0.75

Correlation Coefficient

China Marine  Campbell Soup

Poor diversification

The 3 months correlation between China and Campbell is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Marine Food and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and China Marine 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 China Marine Food 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 China Marine i.e., China Marine and Campbell Soup go up and down completely randomly.

Pair Corralation between China Marine and Campbell Soup

If you would invest  0.01  in China Marine Food on October 24, 2024 and sell it today you would earn a total of  0.00  from holding China Marine Food or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

China Marine Food  vs.  Campbell Soup

China Marine Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Marine Food has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, China Marine is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with China Marine and Campbell Soup

The main advantage of trading using opposite China Marine and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Marine 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.

The idea behind China Marine Food and Campbell Soup 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.