Correlation Between Coursera and Udemy

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

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

Diversification Opportunities for Coursera and Udemy

-0.24

Correlation Coefficient

Coursera  Udemy

Very good diversification

The 3 months correlation between Coursera and Udemy is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Coursera and Udemy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Udemy Inc and Coursera 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 Coursera are associated (or correlated) with Udemy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Udemy Inc has no effect on the direction of Coursera i.e., Coursera and Udemy go up and down completely randomly.

Pair Corralation between Coursera and Udemy

Given the investment horizon of 90 days Coursera is expected to under-perform the Udemy. But the stock apears to be less risky and, when comparing its historical volatility, Coursera is 1.31 times less risky than Udemy. The stock trades about -0.08 of its potential returns per unit of risk. The Udemy Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  806.00  in Udemy Inc on December 29, 2024 and sell it today you would earn a total of  21.00  from holding Udemy Inc or generate 2.61% return on investment over 90 days.

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

Coursera  vs.  Udemy Inc

Coursera

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coursera has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Udemy Inc

Risk-Adjusted Performance

Weak

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

Pair Trading with Coursera and Udemy

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

The idea behind Coursera and Udemy Inc 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.