Correlation Between STEPN and GMX

Can any of the company-specific risk be diversified away by investing in both STEPN and GMX 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 STEPN and GMX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STEPN and GMX, you can compare the effects of market volatilities on STEPN and GMX 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 STEPN with a short position of GMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEPN and GMX.

Diversification Opportunities for STEPN and GMX

0.93

Correlation Coefficient

STEPN  GMX

Almost no diversification

The 3 months correlation between STEPN and GMX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding STEPN and GMX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMX and STEPN 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 STEPN are associated (or correlated) with GMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMX has no effect on the direction of STEPN i.e., STEPN and GMX go up and down completely randomly.

Pair Corralation between STEPN and GMX

Assuming the 90 days trading horizon STEPN is expected to under-perform the GMX. But the crypto coin apears to be less risky and, when comparing its historical volatility, STEPN is 1.05 times less risky than GMX. The crypto coin trades about -0.25 of its potential returns per unit of risk. The GMX is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  2,709  in GMX on December 28, 2024 and sell it today you would lose (1,393) from holding GMX or give up 51.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

STEPN  vs.  GMX

STEPN

Risk-Adjusted Performance

Very Weak

Over the last 90 days STEPN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for STEPN shareholders.

GMX

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for GMX shareholders.

Pair Trading with STEPN and GMX

The main advantage of trading using opposite STEPN and GMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEPN position performs unexpectedly, GMX 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 GMX will offset losses from the drop in GMX's long position.

The idea behind STEPN and GMX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.