Correlation Between Ingredion Incorporated and RLX Technology
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated 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 Ingredion Incorporated and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and RLX Technology, you can compare the effects of market volatilities on Ingredion Incorporated 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 Ingredion Incorporated with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and RLX Technology.
Diversification Opportunities for Ingredion Incorporated and RLX Technology
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ingredion and RLX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated i.e., Ingredion Incorporated and RLX Technology go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and RLX Technology
Given the investment horizon of 90 days Ingredion Incorporated is expected to generate 0.59 times more return on investment than RLX Technology. However, Ingredion Incorporated is 1.7 times less risky than RLX Technology. It trades about 0.1 of its potential returns per unit of risk. RLX Technology is currently generating about -0.01 per unit of risk. If you would invest 10,646 in Ingredion Incorporated on August 25, 2024 and sell it today you would earn a total of 4,001 from holding Ingredion Incorporated or generate 37.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. RLX Technology
Performance |
| Timeline |
| Ingredion Incorporated |
| RLX Technology |
Ingredion Incorporated and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and RLX Technology
The main advantage of trading using opposite Ingredion Incorporated and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated 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.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| RLX Technology vs. Bellring Brands LLC | RLX Technology vs. Ingredion Incorporated | RLX Technology vs. John B Sanfilippo | RLX Technology vs. Nomad 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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