Correlation Between STEPN and Sui
Can any of the company-specific risk be diversified away by investing in both STEPN and Sui 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 Sui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEPN and Sui, you can compare the effects of market volatilities on STEPN and Sui 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 Sui. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEPN and Sui.
Diversification Opportunities for STEPN and Sui
Very poor diversification
The 3 months correlation between STEPN and Sui is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding STEPN and Sui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sui 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 Sui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sui has no effect on the direction of STEPN i.e., STEPN and Sui go up and down completely randomly.
Pair Corralation between STEPN and Sui
Assuming the 90 days trading horizon STEPN is expected to under-perform the Sui. But the crypto coin apears to be less risky and, when comparing its historical volatility, STEPN is 1.05 times less risky than Sui. The crypto coin trades about -0.25 of its potential returns per unit of risk. The Sui is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 412.00 in Sui on December 28, 2024 and sell it today you would lose (162.00) from holding Sui or give up 39.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
STEPN vs. Sui
Performance |
Timeline |
STEPN |
Sui |
STEPN and Sui Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STEPN and Sui
The main advantage of trading using opposite STEPN and Sui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEPN position performs unexpectedly, Sui 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 Sui will offset losses from the drop in Sui's long position.The idea behind STEPN and Sui 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.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 Stocks Directory module to find actively traded stocks across global markets.
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