Correlation Between Hyperliquid and STEPN

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

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

Diversification Opportunities for Hyperliquid and STEPN

-0.23

Correlation Coefficient

Hyperliquid  STEPN

Very good diversification

The 3 months correlation between Hyperliquid and STEPN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hyperliquid and STEPN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STEPN and Hyperliquid 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 Hyperliquid are associated (or correlated) with STEPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STEPN has no effect on the direction of Hyperliquid i.e., Hyperliquid and STEPN go up and down completely randomly.

Pair Corralation between Hyperliquid and STEPN

Assuming the 90 days trading horizon Hyperliquid is expected to generate 24.85 times more return on investment than STEPN. However, Hyperliquid is 24.85 times more volatile than STEPN. It trades about 0.12 of its potential returns per unit of risk. STEPN is currently generating about -0.02 per unit of risk. If you would invest  1,921  in Hyperliquid on April 20, 2025 and sell it today you would earn a total of  2,473  from holding Hyperliquid or generate 128.74% return on investment over 90 days.

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

Hyperliquid  vs.  STEPN

Hyperliquid

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hyperliquid are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hyperliquid exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for STEPN shareholders.

Pair Trading with Hyperliquid and STEPN

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

The idea behind Hyperliquid and STEPN 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.