Correlation Between Cayson Acquisition and Voyager Acquisition

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

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

Diversification Opportunities for Cayson Acquisition and Voyager Acquisition

-0.32

Correlation Coefficient

Cayson Acquisition  Voyager Acquisition

Very good diversification

The 3 months correlation between Cayson and Voyager is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cayson Acquisition Corp and Voyager Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyager Acquisition Corp and Cayson Acquisition 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 Cayson Acquisition Corp are associated (or correlated) with Voyager Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyager Acquisition Corp has no effect on the direction of Cayson Acquisition i.e., Cayson Acquisition and Voyager Acquisition go up and down completely randomly.

Pair Corralation between Cayson Acquisition and Voyager Acquisition

Assuming the 90 days horizon Cayson Acquisition Corp is expected to generate 44.02 times more return on investment than Voyager Acquisition. However, Cayson Acquisition is 44.02 times more volatile than Voyager Acquisition Corp. It trades about 0.21 of its potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest  12.00  in Cayson Acquisition Corp on December 29, 2024 and sell it today you would earn a total of  4.00  from holding Cayson Acquisition Corp or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.51%
Values	Daily Returns

Cayson Acquisition Corp  vs.  Voyager Acquisition Corp

Cayson Acquisition Corp

Risk-Adjusted Performance

Solid

Over the last 90 days Cayson Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile basic indicators, Cayson Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Voyager Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cayson Acquisition and Voyager Acquisition

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

The idea behind Cayson Acquisition Corp and Voyager Acquisition Corp 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.