Correlation Between RLX Technology and British Amer
Can any of the company-specific risk be diversified away by investing in both RLX Technology and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and British American Tobacco, you can compare the effects of market volatilities on RLX Technology and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and British Amer.
Diversification Opportunities for RLX Technology and British Amer
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between RLX and British is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of RLX Technology i.e., RLX Technology and British Amer go up and down completely randomly.
Pair Corralation between RLX Technology and British Amer
Considering the 90-day investment horizon RLX Technology is expected to generate 3.01 times more return on investment than British Amer. However, RLX Technology is 3.01 times more volatile than British American Tobacco. It trades about 0.15 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.38 per unit of risk. If you would invest 170.00 in RLX Technology on August 28, 2024 and sell it today you would earn a total of 13.00 from holding RLX Technology or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. British American Tobacco
Performance |
| Timeline |
| RLX Technology |
| British American Tobacco |
RLX Technology and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and British Amer
The main advantage of trading using opposite RLX Technology and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| RLX Technology vs. Bellring Brands LLC | RLX Technology vs. Ingredion Incorporated | RLX Technology vs. Nomad Foods | RLX Technology vs. Simply Good Foods |
| British Amer vs. Philip Morris International | British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Altria 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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