Correlation Between STEPN and Coin98

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Can any of the company-specific risk be diversified away by investing in both STEPN and Coin98 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 Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEPN and Coin98, you can compare the effects of market volatilities on STEPN and Coin98 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 Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEPN and Coin98.

Diversification Opportunities for STEPN and Coin98

  Correlation Coefficient

Average diversification

The 3 months correlation between STEPN and Coin98 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding STEPN and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 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 Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of STEPN i.e., STEPN and Coin98 go up and down completely randomly.

Pair Corralation between STEPN and Coin98

Assuming the 90 days trading horizon STEPN is expected to under-perform the Coin98. In addition to that, STEPN is 1.07 times more volatile than Coin98. It trades about -0.14 of its total potential returns per unit of risk. Coin98 is currently generating about -0.1 per unit of volatility. If you would invest  111.00  in Coin98 on April 5, 2022 and sell it today you would lose (63.00)  from holding Coin98 or give up 56.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

STEPN  vs.  Coin98

 Performance (%) 
STEPN Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in STEPN are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, STEPN sustained solid returns over the last few months and may actually be approaching a breakup point.

STEPN Price Channel

Coin98 Performance
0 of 100
Over the last 90 days Coin98 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Coin98 investors.

Coin98 Price Channel

STEPN and Coin98 Volatility Contrast

 Predicted Return Density 

Pair Trading with STEPN and Coin98

The main advantage of trading using opposite STEPN and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEPN position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.
The idea behind STEPN and Coin98 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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