Correlation Between RLX Technology and Amgen
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Amgen Inc, you can compare the effects of market volatilities on RLX Technology and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Amgen.
Diversification Opportunities for RLX Technology and Amgen
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RLX and Amgen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of RLX Technology i.e., RLX Technology and Amgen go up and down completely randomly.
Pair Corralation between RLX Technology and Amgen
Considering the 90-day investment horizon RLX Technology is expected to generate 1.13 times more return on investment than Amgen. However, RLX Technology is 1.13 times more volatile than Amgen Inc. It trades about 0.37 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.24 per unit of risk. If you would invest 162.00 in RLX Technology on September 4, 2024 and sell it today you would earn a total of 35.00 from holding RLX Technology or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. Amgen Inc
Performance |
| Timeline |
| RLX Technology |
| Amgen Inc |
RLX Technology and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Amgen
The main advantage of trading using opposite RLX Technology and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen'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 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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