Correlation Between Cayson Acquisition and Solidion Technology

Can any of the company-specific risk be diversified away by investing in both Cayson Acquisition and Solidion Technology 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 Solidion Technology 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 Solidion Technology, you can compare the effects of market volatilities on Cayson Acquisition and Solidion Technology 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 Solidion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayson Acquisition and Solidion Technology.

Diversification Opportunities for Cayson Acquisition and Solidion Technology

-0.44

Correlation Coefficient

Cayson Acquisition  Solidion Technology

Very good diversification

The 3 months correlation between Cayson and Solidion is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cayson Acquisition Corp and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology 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 Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Cayson Acquisition i.e., Cayson Acquisition and Solidion Technology go up and down completely randomly.

Pair Corralation between Cayson Acquisition and Solidion Technology

Assuming the 90 days horizon Cayson Acquisition is expected to generate 5.98 times less return on investment than Solidion Technology. But when comparing it to its historical volatility, Cayson Acquisition Corp is 12.37 times less risky than Solidion Technology. It trades about 0.2 of its potential returns per unit of risk. Solidion Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Solidion Technology on February 9, 2025 and sell it today you would earn a total of  3.00  from holding Solidion Technology or generate 23.08% return on investment over 90 days.

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

Cayson Acquisition Corp  vs.  Solidion Technology

Cayson Acquisition Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cayson Acquisition Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cayson Acquisition may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Solidion Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solidion Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Cayson Acquisition and Solidion Technology

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

The idea behind Cayson Acquisition Corp and Solidion Technology 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.