Correlation Between Gaotu Techedu and Stride
Can any of the company-specific risk be diversified away by investing in both Gaotu Techedu and Stride 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 Gaotu Techedu and Stride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaotu Techedu DRC and Stride Inc, you can compare the effects of market volatilities on Gaotu Techedu and Stride 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 Gaotu Techedu with a short position of Stride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaotu Techedu and Stride.
Diversification Opportunities for Gaotu Techedu and Stride
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaotu and Stride is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gaotu Techedu DRC and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride Inc and Gaotu Techedu 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 Gaotu Techedu DRC are associated (or correlated) with Stride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stride Inc has no effect on the direction of Gaotu Techedu i.e., Gaotu Techedu and Stride go up and down completely randomly.
Pair Corralation between Gaotu Techedu and Stride
Given the investment horizon of 90 days Gaotu Techedu DRC is expected to generate 5.32 times more return on investment than Stride. However, Gaotu Techedu is 5.32 times more volatile than Stride Inc. It trades about 0.33 of its potential returns per unit of risk. Stride Inc is currently generating about 0.05 per unit of risk. If you would invest 219.00 in Gaotu Techedu DRC on December 2, 2024 and sell it today you would earn a total of 132.00 from holding Gaotu Techedu DRC or generate 60.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gaotu Techedu DRC vs. Stride Inc
Performance |
Timeline |
Gaotu Techedu DRC |
Stride Inc |
Gaotu Techedu and Stride Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gaotu Techedu and Stride
The main advantage of trading using opposite Gaotu Techedu and Stride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaotu Techedu position performs unexpectedly, Stride 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 Stride will offset losses from the drop in Stride's long position.Gaotu Techedu vs. TAL Education Group | Gaotu Techedu vs. 17 Education Technology | Gaotu Techedu vs. New Oriental Education | Gaotu Techedu vs. RLX Technology |
Stride vs. Laureate Education | Stride vs. American Public Education | Stride vs. Lincoln Educational Services | Stride vs. Adtalem Global Education |
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.
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