Correlation Between GSX Techedu and Stride

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

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

Diversification Opportunities for GSX Techedu and Stride

0.0

Correlation Coefficient

GSX Techedu  Stride

Pay attention - limited upside

The 3 months correlation between GSX and Stride is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GSX Techedu and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride Inc and GSX 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 GSX Techedu 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 GSX Techedu i.e., GSX Techedu and Stride go up and down completely randomly.

Pair Corralation between GSX Techedu and Stride

If you would invest  4,325  in Stride Inc on October 23, 2024 and sell it today you would earn a total of  7,204  from holding Stride Inc or generate 166.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GSX Techedu  vs.  Stride Inc

GSX Techedu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GSX Techedu has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GSX Techedu is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Stride Inc

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stride Inc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Stride displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GSX Techedu and Stride

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

The idea behind GSX Techedu and Stride 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.