Correlation Between 70466WAA7 and RLX Technology

Can any of the company-specific risk be diversified away by investing in both 70466WAA7 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 70466WAA7 and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US70466WAA71 and RLX Technology, you can compare the effects of market volatilities on 70466WAA7 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 70466WAA7 with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of 70466WAA7 and RLX Technology.

Diversification Opportunities for 70466WAA7 and RLX Technology

0.45

Correlation Coefficient

70466WAA7  RLX Technology

Very weak diversification

The 3 months correlation between 70466WAA7 and RLX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding US70466WAA71 and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and 70466WAA7 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 US70466WAA71 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 70466WAA7 i.e., 70466WAA7 and RLX Technology go up and down completely randomly.

Pair Corralation between 70466WAA7 and RLX Technology

Assuming the 90 days trading horizon US70466WAA71 is expected to under-perform the RLX Technology. But the bond apears to be less risky and, when comparing its historical volatility, US70466WAA71 is 1.26 times less risky than RLX Technology. The bond trades about -0.11 of its potential returns per unit of risk. The RLX Technology is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  191.00  in RLX Technology on October 11, 2024 and sell it today you would earn a total of  28.00  from holding RLX Technology or generate 14.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.0%
Values	Daily Returns

US70466WAA71  vs.  RLX Technology

US70466WAA71

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US70466WAA71 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US70466WAA71 investors.

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.

Pair Trading with 70466WAA7 and RLX Technology

The main advantage of trading using opposite 70466WAA7 and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 70466WAA7 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 US70466WAA71 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..