Correlation Between RLX Technology and Advanced Micro

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

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

Diversification Opportunities for RLX Technology and Advanced Micro

0.42

Correlation Coefficient

RLX Technology  Advanced Micro

Very weak diversification

The 3 months correlation between RLX and Advanced is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of RLX Technology i.e., RLX Technology and Advanced Micro go up and down completely randomly.

Pair Corralation between RLX Technology and Advanced Micro

Considering the 90-day investment horizon RLX Technology is expected to under-perform the Advanced Micro. But the stock apears to be less risky and, when comparing its historical volatility, RLX Technology is 1.5 times less risky than Advanced Micro. The stock trades about -0.09 of its potential returns per unit of risk. The Advanced Micro Devices is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  11,084  in Advanced Micro Devices on February 21, 2025 and sell it today you would earn a total of  267.00  from holding Advanced Micro Devices or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

RLX Technology  vs.  Advanced Micro Devices

RLX Technology

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Advanced Micro Devices

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Advanced Micro may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with RLX Technology and Advanced Micro

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

The idea behind RLX Technology and Advanced Micro Devices 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.