Correlation Between Kansai Electric and RLX Technology
Can any of the company-specific risk be diversified away by investing in both Kansai Electric 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 Kansai Electric and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Kansai Electric and RLX Technology, you can compare the effects of market volatilities on Kansai Electric 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 Kansai Electric with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansai Electric and RLX Technology.
Diversification Opportunities for Kansai Electric and RLX Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kansai and RLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Kansai Electric and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Kansai Electric 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 The Kansai Electric 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 Kansai Electric i.e., Kansai Electric and RLX Technology go up and down completely randomly.
Pair Corralation between Kansai Electric and RLX Technology
If you would invest 247.00 in RLX Technology on December 12, 2024 and sell it today you would lose (19.00) from holding RLX Technology or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
The Kansai Electric vs. RLX Technology
Performance |
| Timeline |
| Kansai Electric |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| RLX Technology |
Kansai Electric and RLX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kansai Electric and RLX Technology
The main advantage of trading using opposite Kansai Electric and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansai Electric 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.| Kansai Electric vs. Zhihu Inc ADR | ||
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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