Correlation Between Gaotu Techedu and Spectrum Brands
Can any of the company-specific risk be diversified away by investing in both Gaotu Techedu and Spectrum Brands 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 Spectrum Brands 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 Spectrum Brands Holdings, you can compare the effects of market volatilities on Gaotu Techedu and Spectrum Brands 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 Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaotu Techedu and Spectrum Brands.
Diversification Opportunities for Gaotu Techedu and Spectrum Brands
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gaotu and Spectrum is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gaotu Techedu DRC and Spectrum Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Brands Holdings 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 Spectrum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Brands Holdings has no effect on the direction of Gaotu Techedu i.e., Gaotu Techedu and Spectrum Brands go up and down completely randomly.
Pair Corralation between Gaotu Techedu and Spectrum Brands
Given the investment horizon of 90 days Gaotu Techedu DRC is expected to under-perform the Spectrum Brands. In addition to that, Gaotu Techedu is 1.07 times more volatile than Spectrum Brands Holdings. It trades about -0.13 of its total potential returns per unit of risk. Spectrum Brands Holdings is currently generating about -0.01 per unit of volatility. If you would invest 5,914 in Spectrum Brands Holdings on August 19, 2025 and sell it today you would lose (321.00) from holding Spectrum Brands Holdings or give up 5.43% 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. Spectrum Brands Holdings
Performance |
| Timeline |
| Gaotu Techedu DRC |
| Spectrum Brands Holdings |
Gaotu Techedu and Spectrum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaotu Techedu and Spectrum Brands
The main advantage of trading using opposite Gaotu Techedu and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaotu Techedu position performs unexpectedly, Spectrum Brands 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 Spectrum Brands will offset losses from the drop in Spectrum Brands' long position.| Gaotu Techedu vs. Udemy Inc | Gaotu Techedu vs. Afya | Gaotu Techedu vs. Phoenix Education Partners, | Gaotu Techedu vs. KinderCare Learning Companies, |
| Spectrum Brands vs. Newell Brands | Spectrum Brands vs. Ingles Markets Incorporated | Spectrum Brands vs. Phoenix Education Partners, | Spectrum Brands vs. Afya |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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