Correlation Between Compania Cervecerias and RLX Technology
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias 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 Compania Cervecerias and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and RLX Technology, you can compare the effects of market volatilities on Compania Cervecerias 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 Compania Cervecerias with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and RLX Technology.
Diversification Opportunities for Compania Cervecerias and RLX Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compania and RLX is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Compania Cervecerias 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 Compania Cervecerias Unidas 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 Compania Cervecerias i.e., Compania Cervecerias and RLX Technology go up and down completely randomly.
Pair Corralation between Compania Cervecerias and RLX Technology
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to under-perform the RLX Technology. But the stock apears to be less risky and, when comparing its historical volatility, Compania Cervecerias Unidas is 1.51 times less risky than RLX Technology. The stock trades about -0.15 of its potential returns per unit of risk. The RLX Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 170.00 in RLX Technology on August 27, 2024 and sell it today you would earn a total of 10.00 from holding RLX Technology or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. RLX Technology
Performance |
| Timeline |
| Compania Cervecerias |
| RLX Technology |
Compania Cervecerias and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and RLX Technology
The main advantage of trading using opposite Compania Cervecerias and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias 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.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| RLX Technology vs. Bellring Brands LLC | RLX Technology vs. Ingredion Incorporated | RLX Technology vs. Nomad Foods | RLX Technology vs. Simply Good Foods |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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