Correlation Between Stride and Gaotu Techedu
Can any of the company-specific risk be diversified away by investing in both Stride and Gaotu Techedu 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 Stride and Gaotu Techedu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stride Inc and Gaotu Techedu DRC, you can compare the effects of market volatilities on Stride and Gaotu Techedu 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 Stride with a short position of Gaotu Techedu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stride and Gaotu Techedu.
Diversification Opportunities for Stride and Gaotu Techedu
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stride and Gaotu is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Stride Inc and Gaotu Techedu DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaotu Techedu DRC and Stride 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 Stride Inc are associated (or correlated) with Gaotu Techedu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaotu Techedu DRC has no effect on the direction of Stride i.e., Stride and Gaotu Techedu go up and down completely randomly.
Pair Corralation between Stride and Gaotu Techedu
Considering the 90-day investment horizon Stride Inc is expected to generate 0.72 times more return on investment than Gaotu Techedu. However, Stride Inc is 1.39 times less risky than Gaotu Techedu. It trades about 0.1 of its potential returns per unit of risk. Gaotu Techedu DRC is currently generating about -0.1 per unit of risk. If you would invest 6,922 in Stride Inc on August 27, 2024 and sell it today you would earn a total of 3,685 from holding Stride Inc or generate 53.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stride Inc vs. Gaotu Techedu DRC
Performance |
| Timeline |
| Stride Inc |
| Gaotu Techedu DRC |
Stride and Gaotu Techedu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stride and Gaotu Techedu
The main advantage of trading using opposite Stride and Gaotu Techedu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stride position performs unexpectedly, Gaotu Techedu 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 Gaotu Techedu will offset losses from the drop in Gaotu Techedu's long position.| Stride vs. Laureate Education | Stride vs. American Public Education | Stride vs. Lincoln Educational Services | Stride vs. Adtalem Global Education |
| Gaotu Techedu vs. TAL Education Group | Gaotu Techedu vs. 17 Education Technology | Gaotu Techedu vs. New Oriental Education | Gaotu Techedu vs. RLX Technology |
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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |