Correlation Between RLX Technology and Singapore Land

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

By analyzing existing cross correlation between RLX Technology and Singapore Land Group, you can compare the effects of market volatilities on RLX Technology and Singapore Land 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 Singapore Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Singapore Land.

Diversification Opportunities for RLX Technology and Singapore Land

0.13

Correlation Coefficient

RLX Technology  Singapore Land

Average diversification

The 3 months correlation between RLX and Singapore is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Singapore Land Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Land Group 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 Singapore Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Land Group has no effect on the direction of RLX Technology i.e., RLX Technology and Singapore Land go up and down completely randomly.

Pair Corralation between RLX Technology and Singapore Land

Considering the 90-day investment horizon RLX Technology is expected to generate 4.04 times more return on investment than Singapore Land. However, RLX Technology is 4.04 times more volatile than Singapore Land Group. It trades about 0.01 of its potential returns per unit of risk. Singapore Land Group is currently generating about -0.05 per unit of risk. If you would invest  228.00  in RLX Technology on March 10, 2024 and sell it today you would lose (44.00) from holding RLX Technology or give up 19.3% 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.  Singapore Land Group

RLX Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RLX Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, RLX Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Singapore Land Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singapore Land Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Singapore Land is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RLX Technology and Singapore Land

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

The idea behind RLX Technology and Singapore Land Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.