Correlation Between RLX TECH and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both RLX TECH and BURLINGTON STORES 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 BURLINGTON STORES 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 BURLINGTON STORES, you can compare the effects of market volatilities on RLX TECH and BURLINGTON STORES 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 BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX TECH and BURLINGTON STORES.
Diversification Opportunities for RLX TECH and BURLINGTON STORES
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RLX and BURLINGTON is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding RLX TECH SPADR1 and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of RLX TECH i.e., RLX TECH and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between RLX TECH and BURLINGTON STORES
Assuming the 90 days horizon RLX TECH SPADR1 is expected to generate 1.52 times more return on investment than BURLINGTON STORES. However, RLX TECH is 1.52 times more volatile than BURLINGTON STORES. It trades about 0.37 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.31 per unit of risk. If you would invest 149.00 in RLX TECH SPADR1 on September 14, 2024 and sell it today you would earn a total of 40.00 from holding RLX TECH SPADR1 or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX TECH SPADR1 vs. BURLINGTON STORES
Performance |
| Timeline |
| RLX TECH SPADR1 |
| BURLINGTON STORES |
RLX TECH and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX TECH and BURLINGTON STORES
The main advantage of trading using opposite RLX TECH and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX TECH position performs unexpectedly, BURLINGTON STORES 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 BURLINGTON STORES will offset losses from the drop in BURLINGTON STORES's long position.| RLX TECH vs. BURLINGTON STORES | RLX TECH vs. Burlington Stores | RLX TECH vs. Transportadora de Gas | RLX TECH vs. Ross Stores |
| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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