Correlation Between Selective Insurance and Cayson Acquisition

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

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

Diversification Opportunities for Selective Insurance and Cayson Acquisition

0.26

Correlation Coefficient

Selective Insurance  Cayson Acquisition

Modest diversification

The 3 months correlation between Selective and Cayson is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Cayson Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayson Acquisition Corp and Selective Insurance 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 Selective Insurance Group are associated (or correlated) with Cayson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayson Acquisition Corp has no effect on the direction of Selective Insurance i.e., Selective Insurance and Cayson Acquisition go up and down completely randomly.

Pair Corralation between Selective Insurance and Cayson Acquisition

Given the investment horizon of 90 days Selective Insurance Group is expected to under-perform the Cayson Acquisition. In addition to that, Selective Insurance is 2.45 times more volatile than Cayson Acquisition Corp. It trades about -0.05 of its total potential returns per unit of risk. Cayson Acquisition Corp is currently generating about -0.11 per unit of volatility. If you would invest  1,131  in Cayson Acquisition Corp on May 27, 2025 and sell it today you would lose (86.00) from holding Cayson Acquisition Corp or give up 7.6% of portfolio value over 90 days.

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

Selective Insurance Group  vs.  Cayson Acquisition Corp

Selective Insurance

Risk-Adjusted Performance

Weakest

Over the last 90 days Selective Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Cayson Acquisition Corp

Risk-Adjusted Performance

Weakest

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Selective Insurance and Cayson Acquisition

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

The idea behind Selective Insurance Group and Cayson 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 CEOs Directory module to screen CEOs from public companies around the world.