Correlation Between Gaotu Techedu and Vasta Platform
Can any of the company-specific risk be diversified away by investing in both Gaotu Techedu and Vasta Platform 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 Vasta Platform 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 Vasta Platform, you can compare the effects of market volatilities on Gaotu Techedu and Vasta Platform 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 Vasta Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaotu Techedu and Vasta Platform.
Diversification Opportunities for Gaotu Techedu and Vasta Platform
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gaotu and Vasta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gaotu Techedu DRC and Vasta Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vasta Platform 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 Vasta Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vasta Platform has no effect on the direction of Gaotu Techedu i.e., Gaotu Techedu and Vasta Platform go up and down completely randomly.
Pair Corralation between Gaotu Techedu and Vasta Platform
Given the investment horizon of 90 days Gaotu Techedu DRC is expected to under-perform the Vasta Platform. In addition to that, Gaotu Techedu is 1.22 times more volatile than Vasta Platform. It trades about -0.38 of its total potential returns per unit of risk. Vasta Platform is currently generating about -0.07 per unit of volatility. If you would invest 263.00 in Vasta Platform on August 28, 2024 and sell it today you would lose (10.00) from holding Vasta Platform or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaotu Techedu DRC vs. Vasta Platform
Performance |
| Timeline |
| Gaotu Techedu DRC |
| Vasta Platform |
Gaotu Techedu and Vasta Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaotu Techedu and Vasta Platform
The main advantage of trading using opposite Gaotu Techedu and Vasta Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaotu Techedu position performs unexpectedly, Vasta Platform 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 Vasta Platform will offset losses from the drop in Vasta Platform'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 |
| Vasta Platform vs. Wah Fu Education | Vasta Platform vs. Golden Sun Education | Vasta Platform vs. Elite Education Group | Vasta Platform vs. QuantaSing Group Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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