Correlation Between RLX Technology and 26442CBJ2

Can any of the company-specific risk be diversified away by investing in both RLX Technology and 26442CBJ2 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 26442CBJ2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RLX Technology and DUK 495 15 JAN 33, you can compare the effects of market volatilities on RLX Technology and 26442CBJ2 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 26442CBJ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and 26442CBJ2.

Diversification Opportunities for RLX Technology and 26442CBJ2

-0.31

Correlation Coefficient

RLX Technology  26442CBJ2

Very good diversification

The 3 months correlation between RLX and 26442CBJ2 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and DUK 495 15 JAN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 495 15 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 26442CBJ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 495 15 has no effect on the direction of RLX Technology i.e., RLX Technology and 26442CBJ2 go up and down completely randomly.

Pair Corralation between RLX Technology and 26442CBJ2

Considering the 90-day investment horizon RLX Technology is expected to generate 3.16 times more return on investment than 26442CBJ2. However, RLX Technology is 3.16 times more volatile than DUK 495 15 JAN 33. It trades about 0.33 of its potential returns per unit of risk. DUK 495 15 JAN 33 is currently generating about -0.06 per unit of risk. If you would invest  160.00  in RLX Technology on October 10, 2024 and sell it today you would earn a total of  59.00  from holding RLX Technology or generate 36.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

RLX Technology  vs.  DUK 495 15 JAN 33

RLX Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RLX Technology are ranked lower than 12 (%) 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.

DUK 495 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 495 15 JAN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CBJ2 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RLX Technology and 26442CBJ2

The main advantage of trading using opposite RLX Technology and 26442CBJ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, 26442CBJ2 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 26442CBJ2 will offset losses from the drop in 26442CBJ2's long position.

The idea behind RLX Technology and DUK 495 15 JAN 33 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.