Correlation Between RLX Technology and Dada Nexus
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Dada Nexus 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 Dada Nexus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Dada Nexus, you can compare the effects of market volatilities on RLX Technology and Dada Nexus 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 Dada Nexus. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Dada Nexus.
Diversification Opportunities for RLX Technology and Dada Nexus
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RLX and Dada is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Dada Nexus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dada Nexus 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 Dada Nexus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dada Nexus has no effect on the direction of RLX Technology i.e., RLX Technology and Dada Nexus go up and down completely randomly.
Pair Corralation between RLX Technology and Dada Nexus
Considering the 90-day investment horizon RLX Technology is expected to generate 0.53 times more return on investment than Dada Nexus. However, RLX Technology is 1.9 times less risky than Dada Nexus. It trades about 0.2 of its potential returns per unit of risk. Dada Nexus is currently generating about -0.17 per unit of risk. If you would invest 161.00 in RLX Technology on August 26, 2024 and sell it today you would earn a total of 19.00 from holding RLX Technology or generate 11.8% 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. Dada Nexus
Performance |
| Timeline |
| RLX Technology |
| Dada Nexus |
RLX Technology and Dada Nexus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Dada Nexus
The main advantage of trading using opposite RLX Technology and Dada Nexus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Dada Nexus 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 Dada Nexus will offset losses from the drop in Dada Nexus' long position.| RLX Technology vs. Bellring Brands LLC | RLX Technology vs. Ingredion Incorporated | RLX Technology vs. Nomad Foods | RLX Technology vs. Post Holdings |
| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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