Correlation Between RLX Technology and Triad Business

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

By analyzing existing cross correlation between RLX Technology and Triad Business Bank, you can compare the effects of market volatilities on RLX Technology and Triad Business 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 Triad Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Triad Business.

Diversification Opportunities for RLX Technology and Triad Business

-0.45

Correlation Coefficient

RLX Technology  Triad Business

Very good diversification

The 3 months correlation between RLX and Triad is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Triad Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Business Bank 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 Triad Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Business Bank has no effect on the direction of RLX Technology i.e., RLX Technology and Triad Business go up and down completely randomly.

Pair Corralation between RLX Technology and Triad Business

Considering the 90-day investment horizon RLX Technology is expected to generate 1.12 times more return on investment than Triad Business. However, RLX Technology is 1.12 times more volatile than Triad Business Bank. It trades about 0.07 of its potential returns per unit of risk. Triad Business Bank is currently generating about 0.01 per unit of risk. If you would invest  181.00  in RLX Technology on October 10, 2024 and sell it today you would earn a total of  39.00  from holding RLX Technology or generate 21.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.64%
Values	Daily Returns

RLX Technology  vs.  Triad Business Bank

RLX Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RLX Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, RLX Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Triad Business Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triad Business Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with RLX Technology and Triad Business

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

The idea behind RLX Technology and Triad Business Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.