Correlation Between Vector and RLX Technology

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

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

Diversification Opportunities for Vector and RLX Technology

0.0

Correlation Coefficient

Vector  RLX Technology

Pay attention - limited upside

The 3 months correlation between Vector and RLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vector Group and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Vector 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 Vector Group 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 Vector i.e., Vector and RLX Technology go up and down completely randomly.

Pair Corralation between Vector and RLX Technology

If you would invest (100.00) in Vector Group on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Vector Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vector Group  vs.  RLX Technology

Vector Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vector Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Vector is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 Vector and RLX Technology

The main advantage of trading using opposite Vector and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vector 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 Vector Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.