Correlation Between RLX Technology and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both RLX Technology and Harmony Gold 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 Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Harmony Gold Mining, you can compare the effects of market volatilities on RLX Technology and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Harmony Gold.
Diversification Opportunities for RLX Technology and Harmony Gold
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RLX and Harmony is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of RLX Technology i.e., RLX Technology and Harmony Gold go up and down completely randomly.
Pair Corralation between RLX Technology and Harmony Gold
Considering the 90-day investment horizon RLX Technology is expected to generate 0.58 times more return on investment than Harmony Gold. However, RLX Technology is 1.72 times less risky than Harmony Gold. It trades about 0.27 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.21 per unit of risk. If you would invest 167.00 in RLX Technology on August 30, 2024 and sell it today you would earn a total of 28.00 from holding RLX Technology or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
RLX Technology vs. Harmony Gold Mining
Performance |
| Timeline |
| RLX Technology |
| Harmony Gold Mining |
RLX Technology and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and Harmony Gold
The main advantage of trading using opposite RLX Technology and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold'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 |
| Harmony Gold vs. SNDL Inc | Harmony Gold vs. Tyson Foods | Harmony Gold vs. Century Aluminum | Harmony Gold vs. Olympic Steel |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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