Correlation Between RLX Technology and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both RLX Technology and CAVA Group, 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 CAVA Group, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and CAVA Group,, you can compare the effects of market volatilities on RLX Technology and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and CAVA Group,.
Diversification Opportunities for RLX Technology and CAVA Group,
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RLX and CAVA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of RLX Technology i.e., RLX Technology and CAVA Group, go up and down completely randomly.
Pair Corralation between RLX Technology and CAVA Group,
Considering the 90-day investment horizon RLX Technology is expected to generate 1.04 times more return on investment than CAVA Group,. However, RLX Technology is 1.04 times more volatile than CAVA Group,. It trades about 0.37 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.13 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. CAVA Group,
Performance |
| Timeline |
| RLX Technology |
| CAVA Group, |
RLX Technology and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and CAVA Group,
The main advantage of trading using opposite RLX Technology and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'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 |
| CAVA Group, vs. Tencent Music Entertainment | CAVA Group, vs. Asbury Automotive Group | CAVA Group, vs. Stagwell | CAVA Group, vs. Fluent Inc |
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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