Correlation Between RLX TECH and Evolent Health
Can any of the company-specific risk be diversified away by investing in both RLX TECH and Evolent Health 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 TECH and Evolent Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX TECH SPADR1 and Evolent Health, you can compare the effects of market volatilities on RLX TECH and Evolent Health 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 TECH with a short position of Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX TECH and Evolent Health.
Diversification Opportunities for RLX TECH and Evolent Health
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RLX and Evolent is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding RLX TECH SPADR1 and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health and RLX TECH 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 TECH SPADR1 are associated (or correlated) with Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of RLX TECH i.e., RLX TECH and Evolent Health go up and down completely randomly.
Pair Corralation between RLX TECH and Evolent Health
Assuming the 90 days horizon RLX TECH SPADR1 is expected to generate 0.23 times more return on investment than Evolent Health. However, RLX TECH SPADR1 is 4.33 times less risky than Evolent Health. It trades about 0.45 of its potential returns per unit of risk. Evolent Health is currently generating about -0.22 per unit of risk. If you would invest 147.00 in RLX TECH SPADR1 on September 1, 2024 and sell it today you would earn a total of 38.00 from holding RLX TECH SPADR1 or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
RLX TECH SPADR1 vs. Evolent Health
Performance |
| Timeline |
| RLX TECH SPADR1 |
| Evolent Health |
RLX TECH and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX TECH and Evolent Health
The main advantage of trading using opposite RLX TECH and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX TECH position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.| RLX TECH vs. INFORMATION SVC GRP | RLX TECH vs. FANDIFI TECHNOLOGY P | RLX TECH vs. Check Point Software | RLX TECH vs. MACOM Technology Solutions |
| Evolent Health vs. COSMOSTEEL HLDGS | Evolent Health vs. CECO ENVIRONMENTAL | Evolent Health vs. GFL ENVIRONM | Evolent Health vs. MAVEN WIRELESS SWEDEN |
Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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