Correlation Between Anheuser Busch and RLX Technology
Can any of the company-specific risk be diversified away by investing in both Anheuser Busch 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 Anheuser Busch and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anheuser Busch Inbev and RLX Technology, you can compare the effects of market volatilities on Anheuser Busch 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 Anheuser Busch with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and RLX Technology.
Diversification Opportunities for Anheuser Busch and RLX Technology
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Anheuser and RLX is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch Inbev and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Anheuser Busch 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 Anheuser Busch Inbev 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 Anheuser Busch i.e., Anheuser Busch and RLX Technology go up and down completely randomly.
Pair Corralation between Anheuser Busch and RLX Technology
Considering the 90-day investment horizon Anheuser Busch Inbev is expected to under-perform the RLX Technology. In addition to that, Anheuser Busch is 1.0 times more volatile than RLX Technology. It trades about -0.13 of its total potential returns per unit of risk. RLX Technology is currently generating about 0.48 per unit of volatility. If you would invest 196.00 in RLX Technology on October 20, 2024 and sell it today you would earn a total of 31.00 from holding RLX Technology or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anheuser Busch Inbev vs. RLX Technology
Performance |
| Timeline |
| Anheuser Busch Inbev |
| RLX Technology |
Anheuser Busch and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anheuser Busch and RLX Technology
The main advantage of trading using opposite Anheuser Busch and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch 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.| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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