According to Multiverse.org, both Rackhir and Elric are incarnations of the Eternal Champion. They both clearly exist in Elric's universe, as Rackhir appears several times without any cosmic interference (as when the Three Who Are One appear). However, Jhary-a-Conel mentions that it's dangerous for incarnations to meet one another when, in The Sleeping Sorceress, Elric, Erekosë, and Corum unite.
(from The Sleeping Sorceress, Book 3, Chapter 5)
"It will suit me," Erekosë said. "I will remain with Elric. Then, perhaps..."
A look almost of terror spread over Jhary's features then. He said sadly: "My friend--already much of time and space is threatened with destruction. Eternal barriers could soon fall--the fabric of the multiverse could decay. You do not understand. Such a thing as has happened in the Vanishing Tower can only happen once or twice in an eternity and even then it is dangerous to all concerned.["]
Worth noting is that Aubec (another incarnation) also appears in this universe, but seems to appear prior to the events of the Elric stories (hence why Elric has his sword in Elric of Melniboné). But this is a case in which two incarnations seem to exist in the same universe, at the same time, and interact with one another regularly.
So, how is that possible (within the realm of Moorcock's Multiverse)?