Correlation Between RLX Technology and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Aldel Financial 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 RLX Technology and Aldel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Aldel Financial II, you can compare the effects of market volatilities on RLX Technology and Aldel Financial 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 RLX Technology with a short position of Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Aldel Financial.
Diversification Opportunities for RLX Technology and Aldel Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RLX and Aldel is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II and RLX Technology 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 RLX Technology are associated (or correlated) with Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of RLX Technology i.e., RLX Technology and Aldel Financial go up and down completely randomly.
Pair Corralation between RLX Technology and Aldel Financial
Considering the 90-day investment horizon RLX Technology is expected to generate 23.69 times more return on investment than Aldel Financial. However, RLX Technology is 23.69 times more volatile than Aldel Financial II. It trades about 0.39 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.0 per unit of risk. If you would invest 161.00 in RLX Technology on September 2, 2024 and sell it today you would earn a total of 37.00 from holding RLX Technology or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. Aldel Financial II
Performance |
| Timeline |
| RLX Technology |
| Aldel Financial II |
RLX Technology and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Aldel Financial
The main advantage of trading using opposite RLX Technology and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| RLX Technology vs. Green Globe International | RLX Technology vs. Kaival Brands Innovations | RLX Technology vs. Greenlane Holdings | RLX Technology vs. 22nd Century Group |
| Aldel Financial vs. Stepan Company | Aldel Financial vs. Apogee Enterprises | Aldel Financial vs. Sphere Entertainment Co | Aldel Financial vs. Radcom |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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