Correlation Between Pi Network and STEPN

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

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

Diversification Opportunities for Pi Network and STEPN

0.71

Correlation Coefficient

Pi Network  STEPN

Poor diversification

The 3 months correlation between Pi Network and STEPN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pi Network and STEPN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STEPN and Pi Network 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 Pi Network 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 Pi Network i.e., Pi Network and STEPN go up and down completely randomly.

Pair Corralation between Pi Network and STEPN

Assuming the 90 days horizon Pi Network is expected to generate 2.12 times less return on investment than STEPN. In addition to that, Pi Network is 2.04 times more volatile than STEPN. It trades about 0.0 of its total potential returns per unit of risk. STEPN is currently generating about 0.01 per unit of volatility. If you would invest  5.67  in STEPN on April 23, 2025 and sell it today you would lose (0.34) from holding STEPN or give up 6.0% of portfolio value over 90 days.

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

Pi Network  vs.  STEPN

Pi Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pi Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Pi Network is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 rather sound basic indicators, STEPN is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pi Network and STEPN

The main advantage of trading using opposite Pi Network and STEPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pi Network 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 Pi Network 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.