Correlation Between RLX Technology and Atai Life

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Can any of the company-specific risk be diversified away by investing in both RLX Technology and Atai Life 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 Atai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLX Technology and Atai Life Sciences, you can compare the effects of market volatilities on RLX Technology and Atai Life 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 Atai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLX Technology and Atai Life.

Diversification Opportunities for RLX Technology and Atai Life

  Correlation Coefficient

Good diversification

The 3 months correlation between RLX Technology and Atai Life is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding RLX Technology Inc and Atai Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atai Life Sciences 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 Atai Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atai Life Sciences has no effect on the direction of RLX Technology i.e., RLX Technology and Atai Life go up and down completely randomly.

Pair Corralation between RLX Technology and Atai Life

Considering the 90-day investment horizon RLX Technology is expected to generate 1.51 times more return on investment than Atai Life. However, RLX Technology is 1.51 times more volatile than Atai Life Sciences. It trades about 0.22 of its potential returns per unit of risk. Atai Life Sciences is currently generating about 0.05 per unit of risk. If you would invest  135.00  in RLX Technology on August 29, 2022 and sell it today you would earn a total of  53.00  from holding RLX Technology or generate 39.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

RLX Technology Inc  vs.  Atai Life Sciences

 Performance (%) 
RLX Technology 
RLX Technology Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in RLX Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish essential indicators, RLX Technology showed solid returns over the last few months and may actually be approaching a breakup point.

RLX Technology Price Channel

Atai Life Sciences 
Atai Life Performance
0 of 100
Over the last 90 days Atai Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Atai Life Price Channel

RLX Technology and Atai Life Volatility Contrast

   Predicted Return Density   

Pair Trading with RLX Technology and Atai Life

The main advantage of trading using opposite RLX Technology and Atai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLX Technology position performs unexpectedly, Atai Life 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 Atai Life will offset losses from the drop in Atai Life's long position.
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The idea behind RLX Technology and Atai Life Sciences 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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