Correlation Between EAU Technologies and RLX Technology

Can any of the company-specific risk be diversified away by investing in both EAU Technologies and RLX Technology 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 EAU Technologies and RLX Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EAU Technologies and RLX Technology, you can compare the effects of market volatilities on EAU Technologies and RLX Technology 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 EAU Technologies with a short position of RLX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAU Technologies and RLX Technology.

Diversification Opportunities for EAU Technologies and RLX Technology

0.0

Correlation Coefficient

EAU Technologies  RLX Technology

Pay attention - limited upside

The 3 months correlation between EAU and RLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EAU Technologies and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and EAU Technologies 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 EAU Technologies are associated (or correlated) with RLX Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLX Technology has no effect on the direction of EAU Technologies i.e., EAU Technologies and RLX Technology go up and down completely randomly.

Pair Corralation between EAU Technologies and RLX Technology

If you would invest  178.00  in RLX Technology on January 25, 2024 and sell it today you would earn a total of  5.00  from holding RLX Technology or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EAU Technologies  vs.  RLX Technology

EAU Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAU Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, EAU Technologies is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

RLX Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RLX Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, RLX Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EAU Technologies and RLX Technology

The main advantage of trading using opposite EAU Technologies and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAU Technologies position performs unexpectedly, RLX Technology 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 Technology will offset losses from the drop in RLX Technology's long position.

The idea behind EAU Technologies and RLX Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.