Correlation Between Contextlogic and RLX Technology

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

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

Diversification Opportunities for Contextlogic and RLX Technology

0.4

Correlation Coefficient

Contextlogic  RLX Technology

Very weak diversification

The 3 months correlation between Contextlogic and RLX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Contextlogic and RLX Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLX Technology and Contextlogic 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 Contextlogic 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 Contextlogic i.e., Contextlogic and RLX Technology go up and down completely randomly.

Pair Corralation between Contextlogic and RLX Technology

Given the investment horizon of 90 days Contextlogic is expected to generate 7.26 times less return on investment than RLX Technology. In addition to that, Contextlogic is 2.94 times more volatile than RLX Technology. It trades about 0.01 of its total potential returns per unit of risk. RLX Technology is currently generating about 0.18 per unit of volatility. If you would invest  188.00  in RLX Technology on May 12, 2025 and sell it today you would earn a total of  34.00  from holding RLX Technology or generate 18.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	46.03%
Values	Daily Returns

Contextlogic  vs.  RLX Technology

Contextlogic

Risk-Adjusted Performance

Weakest

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Contextlogic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

RLX Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RLX Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, RLX Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Contextlogic and RLX Technology

The main advantage of trading using opposite Contextlogic and RLX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contextlogic 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 Contextlogic 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.