Correlation Between CenterPoint Energy and RLX Technology
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy 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 CenterPoint Energy and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and RLX Technology, you can compare the effects of market volatilities on CenterPoint Energy 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 CenterPoint Energy with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and RLX Technology.
Diversification Opportunities for CenterPoint Energy and RLX Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CenterPoint and RLX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and CenterPoint Energy 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 CenterPoint Energy 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 CenterPoint Energy i.e., CenterPoint Energy and RLX Technology go up and down completely randomly.
Pair Corralation between CenterPoint Energy and RLX Technology
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 0.38 times more return on investment than RLX Technology. However, CenterPoint Energy is 2.61 times less risky than RLX Technology. It trades about 0.17 of its potential returns per unit of risk. RLX Technology is currently generating about 0.05 per unit of risk. If you would invest 2,967 in CenterPoint Energy on January 10, 2025 and sell it today you would earn a total of 659.00 from holding CenterPoint Energy or generate 22.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. RLX Technology
Performance |
| Timeline |
| CenterPoint Energy |
| RLX Technology |
CenterPoint Energy and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and RLX Technology
The main advantage of trading using opposite CenterPoint Energy and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy 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.| CenterPoint Energy vs. DTE Energy | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Pinnacle West Capital |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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