Correlation Between New Oriental and Gaotu Techedu
Can any of the company-specific risk be diversified away by investing in both New Oriental 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 New Oriental and Gaotu Techedu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Oriental Education and Gaotu Techedu DRC, you can compare the effects of market volatilities on New Oriental 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 New Oriental with a short position of Gaotu Techedu. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and Gaotu Techedu.
Diversification Opportunities for New Oriental and Gaotu Techedu
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Gaotu is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education 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 New Oriental 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 New Oriental Education 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 New Oriental i.e., New Oriental and Gaotu Techedu go up and down completely randomly.
Pair Corralation between New Oriental and Gaotu Techedu
Considering the 90-day investment horizon New Oriental Education is expected to generate 1.01 times more return on investment than Gaotu Techedu. However, New Oriental is 1.01 times more volatile than Gaotu Techedu DRC. It trades about 0.03 of its potential returns per unit of risk. Gaotu Techedu DRC is currently generating about -0.06 per unit of risk. If you would invest 4,862 in New Oriental Education on June 10, 2025 and sell it today you would earn a total of 147.00 from holding New Oriental Education or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Oriental Education vs. Gaotu Techedu DRC
Performance |
| Timeline |
| New Oriental Education |
| Gaotu Techedu DRC |
New Oriental and Gaotu Techedu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Oriental and Gaotu Techedu
The main advantage of trading using opposite New Oriental and Gaotu Techedu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental 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.| New Oriental vs. TAL Education Group | New Oriental vs. Gaotu Techedu DRC | New Oriental vs. 17 Education Technology | New Oriental vs. Chegg Inc |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |