Correlation Between Sui and STEEMD

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

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

Diversification Opportunities for Sui and STEEMD

0.83

Correlation Coefficient

Sui  STEEMD

Very poor diversification

The 3 months correlation between Sui and STEEMD is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sui and STEEMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STEEMD and Sui 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 Sui are associated (or correlated) with STEEMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STEEMD has no effect on the direction of Sui i.e., Sui and STEEMD go up and down completely randomly.

Pair Corralation between Sui and STEEMD

Assuming the 90 days trading horizon Sui is expected to under-perform the STEEMD. But the crypto coin apears to be less risky and, when comparing its historical volatility, Sui is 4.7 times less risky than STEEMD. The crypto coin trades about -0.11 of its potential returns per unit of risk. The STEEMD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  178.00  in STEEMD on December 30, 2024 and sell it today you would lose (151.00) from holding STEEMD or give up 84.83% of portfolio value over 90 days.

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

Sui  vs.  STEEMD

Sui

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sui 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 forward 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 Sui shareholders.

STEEMD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STEEMD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, STEEMD sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sui and STEEMD

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

The idea behind Sui and STEEMD 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.