Correlation Between 26442CAR5 and RLX Technology

Can any of the company-specific risk be diversified away by investing in both 26442CAR5 and RLX Technology 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 26442CAR5 and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and RLX Technology, you can compare the effects of market volatilities on 26442CAR5 and RLX Technology 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 26442CAR5 with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAR5 and RLX Technology.

Diversification Opportunities for 26442CAR5 and RLX Technology

0.61

Correlation Coefficient

26442CAR5  RLX Technology

Poor diversification

The 3 months correlation between 26442CAR5 and RLX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and 26442CAR5 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 DUKE ENERGY CAROLINAS are associated (or correlated) with RLX Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLX Technology has no effect on the direction of 26442CAR5 i.e., 26442CAR5 and RLX Technology go up and down completely randomly.

Pair Corralation between 26442CAR5 and RLX Technology

Assuming the 90 days trading horizon DUKE ENERGY CAROLINAS is expected to under-perform the RLX Technology. But the bond apears to be less risky and, when comparing its historical volatility, DUKE ENERGY CAROLINAS is 1.41 times less risky than RLX Technology. The bond trades about -0.13 of its potential returns per unit of risk. The RLX Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  201.00  in RLX Technology on December 22, 2024 and sell it today you would lose (2.00) from holding RLX Technology or give up 1.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	60.0%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  RLX Technology

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for DUKE ENERGY CAROLINAS investors.

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 fairly strong essential indicators, RLX Technology is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 26442CAR5 and RLX Technology

The main advantage of trading using opposite 26442CAR5 and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAR5 position performs unexpectedly, RLX Technology 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 RLX Technology will offset losses from the drop in RLX Technology's long position.

The idea behind DUKE ENERGY CAROLINAS and RLX Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.