Correlation Between RLX Technology and Greenlane Holdings
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Greenlane 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 Greenlane 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 Greenlane Holdings, you can compare the effects of market volatilities on RLX Technology and Greenlane 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 Greenlane Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Greenlane Holdings.
Diversification Opportunities for RLX Technology and Greenlane Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between RLX and Greenlane is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Greenlane Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane 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 Greenlane Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Holdings has no effect on the direction of RLX Technology i.e., RLX Technology and Greenlane Holdings go up and down completely randomly.
Pair Corralation between RLX Technology and Greenlane Holdings
Considering the 90-day investment horizon RLX Technology is expected to under-perform the Greenlane Holdings. But the stock apears to be less risky and, when comparing its historical volatility, RLX Technology is 5.1 times less risky than Greenlane Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Greenlane Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,192 in Greenlane Holdings on August 27, 2024 and sell it today you would lose (5,012) from holding Greenlane Holdings or give up 96.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. Greenlane Holdings
Performance |
| Timeline |
| RLX Technology |
| Greenlane Holdings |
RLX Technology and Greenlane Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Greenlane Holdings
The main advantage of trading using opposite RLX Technology and Greenlane Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Greenlane 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 Greenlane Holdings will offset losses from the drop in Greenlane Holdings' long position.| RLX Technology vs. Bellring Brands LLC | RLX Technology vs. Ingredion Incorporated | RLX Technology vs. Nomad Foods | RLX Technology vs. Post Holdings |
| Greenlane Holdings vs. 1606 Corp | Greenlane Holdings vs. PT Hanjaya Mandala | Greenlane Holdings vs. Green Globe International | Greenlane Holdings vs. Kaival Brands Innovations |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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