Correlation Between RLX TECH and Alaska Air
Can any of the company-specific risk be diversified away by investing in both RLX TECH and Alaska Air 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 Alaska Air 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 Alaska Air Group, you can compare the effects of market volatilities on RLX TECH and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX TECH and Alaska Air.
Diversification Opportunities for RLX TECH and Alaska Air
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RLX and Alaska is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding RLX TECH SPADR1 and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of RLX TECH i.e., RLX TECH and Alaska Air go up and down completely randomly.
Pair Corralation between RLX TECH and Alaska Air
Assuming the 90 days horizon RLX TECH is expected to generate 5.69 times less return on investment than Alaska Air. In addition to that, RLX TECH is 1.18 times more volatile than Alaska Air Group. It trades about 0.01 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.08 per unit of volatility. If you would invest 3,312 in Alaska Air Group on September 4, 2024 and sell it today you would earn a total of 1,665 from holding Alaska Air Group or generate 50.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX TECH SPADR1 vs. Alaska Air Group
Performance |
| Timeline |
| RLX TECH SPADR1 |
| Alaska Air Group |
RLX TECH and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX TECH and Alaska Air
The main advantage of trading using opposite RLX TECH and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX TECH position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| RLX TECH vs. Transport International Holdings | RLX TECH vs. USWE SPORTS AB | RLX TECH vs. JD SPORTS FASH | RLX TECH vs. CapitaLand Investment Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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