Correlation Between Air Lease and RLX Technology
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and RLX Technology, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and RLX Technology.
Diversification Opportunities for Air Lease and RLX Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and RLX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and RLX Technology go up and down completely randomly.
Pair Corralation between Air Lease and RLX Technology
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.68 times less return on investment than RLX Technology. But when comparing it to its historical volatility, Air Lease is 1.4 times less risky than RLX Technology. It trades about 0.28 of its potential returns per unit of risk. RLX Technology is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 163.00 in RLX Technology on August 31, 2024 and sell it today you would earn a total of 32.00 from holding RLX Technology or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Lease vs. RLX Technology
Performance |
| Timeline |
| Air Lease |
| RLX Technology |
Air Lease and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and RLX Technology
The main advantage of trading using opposite Air Lease and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| RLX Technology vs. Green Globe International | RLX Technology vs. Kaival Brands Innovations | RLX Technology vs. Greenlane Holdings | RLX Technology vs. 22nd Century Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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