Correlation Between Cayson Acquisition and Western Midstream

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

Diversification Opportunities for Cayson Acquisition and Western Midstream

-0.15

Correlation Coefficient

Cayson Acquisition  Western Midstream

Good diversification

The 3 months correlation between Cayson and Western is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cayson Acquisition Corp and Western Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Midstream 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 Western Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Midstream has no effect on the direction of Cayson Acquisition i.e., Cayson Acquisition and Western Midstream go up and down completely randomly.

Pair Corralation between Cayson Acquisition and Western Midstream

Assuming the 90 days horizon Cayson Acquisition is expected to generate 72.59 times less return on investment than Western Midstream. In addition to that, Cayson Acquisition is 1.22 times more volatile than Western Midstream Partners. It trades about 0.0 of its total potential returns per unit of risk. Western Midstream Partners is currently generating about 0.17 per unit of volatility. If you would invest  3,638  in Western Midstream Partners on May 1, 2025 and sell it today you would earn a total of  480.00  from holding Western Midstream Partners or generate 13.19% return on investment over 90 days.

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

Cayson Acquisition Corp  vs.  Western Midstream Partners

Cayson Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cayson Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cayson Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Western Midstream

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Western Midstream Partners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Western Midstream unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cayson Acquisition and Western Midstream

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

The idea behind Cayson Acquisition Corp and Western Midstream Partners 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.