Correlation Between Spectrum Brands and Gaotu Techedu
Can any of the company-specific risk be diversified away by investing in both Spectrum Brands 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 Spectrum Brands and Gaotu Techedu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Brands Holdings and Gaotu Techedu DRC, you can compare the effects of market volatilities on Spectrum Brands 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 Spectrum Brands with a short position of Gaotu Techedu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Brands and Gaotu Techedu.
Diversification Opportunities for Spectrum Brands and Gaotu Techedu
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spectrum and Gaotu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings 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 Spectrum Brands 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 Spectrum Brands Holdings 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 Spectrum Brands i.e., Spectrum Brands and Gaotu Techedu go up and down completely randomly.
Pair Corralation between Spectrum Brands and Gaotu Techedu
Considering the 90-day investment horizon Spectrum Brands Holdings is expected to under-perform the Gaotu Techedu. But the stock apears to be less risky and, when comparing its historical volatility, Spectrum Brands Holdings is 2.65 times less risky than Gaotu Techedu. The stock trades about -0.01 of its potential returns per unit of risk. The Gaotu Techedu DRC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 261.00 in Gaotu Techedu DRC on August 13, 2025 and sell it today you would earn a total of 8.50 from holding Gaotu Techedu DRC or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Spectrum Brands Holdings vs. Gaotu Techedu DRC
Performance |
| Timeline |
| Spectrum Brands Holdings |
| Gaotu Techedu DRC |
Spectrum Brands and Gaotu Techedu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Brands and Gaotu Techedu
The main advantage of trading using opposite Spectrum Brands and Gaotu Techedu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands 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.| Spectrum Brands vs. Newell Brands | Spectrum Brands vs. Ingles Markets Incorporated | Spectrum Brands vs. Phoenix Education Partners, | Spectrum Brands vs. Afya |
| Gaotu Techedu vs. Udemy Inc | Gaotu Techedu vs. Afya | Gaotu Techedu vs. Phoenix Education Partners, | Gaotu Techedu vs. KinderCare Learning Companies, |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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