Correlation Between INFORMATION SVC and RLX TECH
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and RLX TECH 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 INFORMATION SVC and RLX TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and RLX TECH SPADR1, you can compare the effects of market volatilities on INFORMATION SVC and RLX TECH 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 INFORMATION SVC with a short position of RLX TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and RLX TECH.
Diversification Opportunities for INFORMATION SVC and RLX TECH
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INFORMATION and RLX is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and RLX TECH SPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX TECH SPADR1 and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with RLX TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLX TECH SPADR1 has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and RLX TECH go up and down completely randomly.
Pair Corralation between INFORMATION SVC and RLX TECH
Assuming the 90 days horizon INFORMATION SVC is expected to generate 17.48 times less return on investment than RLX TECH. But when comparing it to its historical volatility, INFORMATION SVC GRP is 1.23 times less risky than RLX TECH. It trades about 0.0 of its potential returns per unit of risk. RLX TECH SPADR1 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 163.00 in RLX TECH SPADR1 on September 3, 2024 and sell it today you would earn a total of 22.00 from holding RLX TECH SPADR1 or generate 13.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. RLX TECH SPADR1
Performance |
| Timeline |
| INFORMATION SVC GRP |
| RLX TECH SPADR1 |
INFORMATION SVC and RLX TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and RLX TECH
The main advantage of trading using opposite INFORMATION SVC and RLX TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC position performs unexpectedly, RLX TECH 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 RLX TECH will offset losses from the drop in RLX TECH's long position.| INFORMATION SVC vs. TOTAL GABON | INFORMATION SVC vs. Walgreens Boots Alliance | INFORMATION SVC vs. Peak Resources Limited |
| RLX TECH vs. Alaska Air Group | RLX TECH vs. MOVIE GAMES SA | RLX TECH vs. Apollo Investment Corp | RLX TECH vs. PennyMac Mortgage Investment |
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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