Correlation Between RLX Technology and Cannae Holdings
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Cannae Holdings 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 Cannae Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Cannae Holdings, you can compare the effects of market volatilities on RLX Technology and Cannae Holdings 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 Cannae Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Cannae Holdings.
Diversification Opportunities for RLX Technology and Cannae Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RLX and Cannae is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings 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 Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of RLX Technology i.e., RLX Technology and Cannae Holdings go up and down completely randomly.
Pair Corralation between RLX Technology and Cannae Holdings
Considering the 90-day investment horizon RLX Technology is expected to generate 2.2 times more return on investment than Cannae Holdings. However, RLX Technology is 2.2 times more volatile than Cannae Holdings. It trades about 0.29 of its potential returns per unit of risk. Cannae Holdings is currently generating about -0.09 per unit of risk. If you would invest 160.00 in RLX Technology on September 12, 2024 and sell it today you would earn a total of 31.00 from holding RLX Technology or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
RLX Technology vs. Cannae Holdings
Performance |
| Timeline |
| RLX Technology |
| Cannae Holdings |
RLX Technology and Cannae Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Cannae Holdings
The main advantage of trading using opposite RLX Technology and Cannae Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Cannae Holdings 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 Cannae Holdings will offset losses from the drop in Cannae Holdings' long position.| RLX Technology vs. Universal | RLX Technology vs. Imperial Brands PLC | RLX Technology vs. British American Tobacco | RLX Technology vs. Philip Morris International |
| Cannae Holdings vs. Brightsphere Investment Group | Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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