Correlation Between RLX Technology and WEBTOON Entertainment
Can any of the company-specific risk be diversified away by investing in both RLX Technology and WEBTOON Entertainment 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 WEBTOON Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and WEBTOON Entertainment Common, you can compare the effects of market volatilities on RLX Technology and WEBTOON Entertainment 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 WEBTOON Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and WEBTOON Entertainment.
Diversification Opportunities for RLX Technology and WEBTOON Entertainment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RLX and WEBTOON is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of RLX Technology i.e., RLX Technology and WEBTOON Entertainment go up and down completely randomly.
Pair Corralation between RLX Technology and WEBTOON Entertainment
Considering the 90-day investment horizon RLX Technology is expected to generate 0.6 times more return on investment than WEBTOON Entertainment. However, RLX Technology is 1.68 times less risky than WEBTOON Entertainment. It trades about 0.07 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.05 per unit of risk. If you would invest 180.00 in RLX Technology on October 25, 2024 and sell it today you would earn a total of 38.00 from holding RLX Technology or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLX Technology vs. WEBTOON Entertainment Common
Performance |
| Timeline |
| RLX Technology |
| WEBTOON Entertainment |
RLX Technology and WEBTOON Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLX Technology and WEBTOON Entertainment
The main advantage of trading using opposite RLX Technology and WEBTOON Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, WEBTOON Entertainment 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 WEBTOON Entertainment will offset losses from the drop in WEBTOON Entertainment'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 |
| WEBTOON Entertainment vs. Summit Therapeutics PLC | WEBTOON Entertainment vs. Constellation Brands Class | WEBTOON Entertainment vs. RLX Technology | WEBTOON Entertainment vs. Ambev SA ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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