Correlation Between RLX Technology and Bitcoin Depot

Can any of the company-specific risk be diversified away by investing in both RLX Technology and Bitcoin Depot 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 RLX Technology and Bitcoin Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RLX Technology and Bitcoin Depot, you can compare the effects of market volatilities on RLX Technology and Bitcoin Depot 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 RLX Technology with a short position of Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Bitcoin Depot.

Diversification Opportunities for RLX Technology and Bitcoin Depot

-0.54

Correlation Coefficient

RLX Technology  Bitcoin Depot

Excellent diversification

The 3 months correlation between RLX and Bitcoin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot and RLX Technology 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 RLX Technology are associated (or correlated) with Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of RLX Technology i.e., RLX Technology and Bitcoin Depot go up and down completely randomly.

Pair Corralation between RLX Technology and Bitcoin Depot

Considering the 90-day investment horizon RLX Technology is expected to generate 1.9 times less return on investment than Bitcoin Depot. But when comparing it to its historical volatility, RLX Technology is 2.3 times less risky than Bitcoin Depot. It trades about 0.05 of its potential returns per unit of risk. Bitcoin Depot is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  144.00  in Bitcoin Depot on December 27, 2024 and sell it today you would earn a total of  15.00  from holding Bitcoin Depot or generate 10.42% return on investment over 90 days.

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

RLX Technology  vs.  Bitcoin Depot

RLX Technology

Risk-Adjusted Performance

Very Weak

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

Bitcoin Depot

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bitcoin Depot is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with RLX Technology and Bitcoin Depot

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

The idea behind RLX Technology and Bitcoin Depot 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..